The Daily Telegraph
Treasury admits it doesn’t know cost of energy price freeze
THE Treasury will effectively admit it does not know how much the energy price freeze will cost the taxpayer next week when a tax-cutting plan for growth is revealed.
The fiscal statement that Liz Truss promised during her Tory leadership campaign over the summer has been earmarked for Friday Sept 23. It is expected to announce the reversal of the 1.25pc National Insurance increase and cancellation of the corporation tax rise, two flagship campaign promises.
A stripping back of regulations – including the removal of a European Union-imposed bankers’ bonus cap – is also expected. The focus will be kickstarting economic growth.
The Government is to meet with some of the largest power producers to set a cap on wholesale electricity prices from this winter, in an attempt to provide some long-term certainty. New Business Secretary Jacob Rees-mogg would sign long-term contracts with low-carbon energy sources such as wind farms, nuclear plants and biomass-burning stations to sell power at fixed prices.
Westminster is looking to get the measure set up as soon as possible, potentially by Oct 1, according to Bloomberg. A broader reform of the UK’S energy security, meanwhile, is said to have been pushed back to prioritise the emergency steps.
The Energy Security Bill is currently making its way through the House of Lords and includes reforms such as shifting responsibilities from the National Grid to a new public body that would oversee the energy system.
The bill is now facing a pause or even being scrapped, according to the Financial Times, which said Mr Reesmogg had told officials that the bill needed to reflect the new Government’s priorities.
Full costings for last week’s vast government intervention to freeze household energy bills for two years and business energy bills for six months were expected at the fiscal statement.
However The Telegraph understands that no total cost will be spelled out by the Treasury. Instead, only short-term costs will be spelled out, possibly for just a few months.
The approach has been taken because the wholesale energy price is unpredictable and a new drive to renegotiate long term energy contracts which could have an impact is only just beginning.
But the reluctance to put a figure on the total cost to the Exchequer – despite think tanks and industry bodies coming up with estimates – could trigger criticism from opposition MPS.