Liz Truss has refused to tax energy giants to pay for the massive bill freeze she's expected to announce tomorrow. In her first appearance at PMQs earlier today (Wednesday, September 7), Truss was grilled by Labour leader Keir Starmer on whether energy companies would be made to pick up the bill for the plans, which are expected to freeze household bills at around £2,500.
The freeze could cost up to £150 billion, but when asked by Keir Starmer whether this cost would be passed on to the energy suppliers, the new Prime Minister refused to entertain the idea. In her first PMQs after being elected Conservative leader, she said: "I believe it is the wrong thing to be putting companies off investing in the UK just as we need to be growing the economy."
The Labour leader said that, unless energy bills making massive profits from the spike in prices were made to pay for the freeze, working people would be made to "foot the bill for decades to come" either through their taxes or energy bills. He challenged the PM, saying: "Can't she see there's nothing new about a Tory PM who, when asked who pays, answers, 'you, the working people of Britain."
In the House of Commons, she confirmed: "I will be making an announcement to this House on that tomorrow and giving people certainty to make sure they are able to get through this winter. I will make sure that in our energy plan we will help to support businesses and people with the immediate price crisis, as well as making sure there are long-term supplies available."
Truss plans to fund the freeze by pinning the cost on the national debt, according to the Mirror - creating doubt around whether her plans to cut taxes at the same times are feasible. She clashed frequently with Rishi Sunak on this during the leadership campaign - with the ex-Chancellor's spokesperson saying in August: "The reality is that Truss cannot deliver a support package as well as come good on £50 billion worth of unfunded, permanent tax cuts in one go," according to Bloomberg.
Truss's allies have claimed freezing bills at £2,500 a year would basically keep them the same as they are now, the Mirror also reports. Although the current cap is £1,971, a £400 discount and plans to scrap the £153 green levy would bring bills after the freeze back below £2,000.
A Truss ally has indicated the cap would be on wholesale energy costs, not retail prices - meaning businesses would also benefit from the cap. The PM pledged in her first speech outside No 10 to "take action this week to deal with energy bills and to secure our future energy supply."
SNP leader Ian Blackford said: "After nine questions she’s still not told us who will pay." The PM's spokesperson said the current windfall tax on oil and gas profits won't be scrapped - but also won't be increased further, to ensure investment in domestic oil and gas continues.
Truss's refusal to make energy giants pay could make difficult reading following the reports that BP's profits have trebled in the last year. The situation has reached a point where even former BP bosses have blasted the increase as putting the costs on "ordinary people."
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