Energy bills: Liz Truss accused of ‘handing public money to profiteers’

Liz Truss has been accused of bailing out a failing system

Liz Truss speaking in the House of Commons

Liz Truss has finally announced her plans to address major rises in energy bills. Speaking in the House of Commons, Truss said the government will freeze the energy price cap at £2,500 for the typical household until 2024.

The package has been suggested to cost over £130bn, but Truss has not confirmed the costs, instead saying this will be revealed later in the month. Truss’ plan is thought to be financed through borrowing, as she has ruled out funding it with a windfall tax on oil and gas profits.

The policy has not been warmly received by campaigners and MPs. The plan has been criticised for protecting private energy company profits rather than taxing them, its high price tag and the still significant bills people will be asked to pay.

Labour leader Sir Keir Starmer said in response to the announcement, “The head of BP has called this crisis a ‘cash machine’ for his company, and households are on the other end of that cash machine – their bills funding these eye-watering profits. That’s why we’ve been calling for a windfall tax since January, and it’s why we want to see the windfall tax expanded now. But the prime minister is opposed to windfall taxes. She wants to leave these vast profits on the table, with one clear and obvious consequence: the bill will be picked up by working people.”

Green MP Caroline Lucas tweeted, “Freezing the energy price cap at its current rate is already unaffordable for so many people who are already struggling *right now* – we need @TheGreenParty plan to freeze it at last October’s more affordable level #energybills”.

Lucas’ comments have been echoed by campaigning charity Debt Justice. Heidi Chow, the charity’s executive director said, “Despite this intervention, energy bills will almost double for millions of households this year. Coming at a time of falling incomes and soaring inflation, energy bills are still unaffordable and will force more people into debt. The government must write off energy debts that have already built up to give people in debt a fighting chance of surviving this winter.”

Some campaigners have also argued that public ownership of elements of the energy system would be a more effective approach.

During the debate on the announcement, Labour MP Richard Burgon asked, “why is the prime minister putting private energy profits ahead of people at this crucial time?”

Cat Hobbs, Director of anti-privatisation campaign group We Own It said, “62% of Conservative voters back public ownership in this crisis, so Truss has a mandate to take back control of our energy system to make it work for the British people. Instead, she’s handing out public money to the profiteers without giving us a stake in our own energy system. Real energy security means taxing producers properly and using public ownership to cut bills and invest in renewable energy for the future. Privatisation has been failing since 1986 – we need to do more than bail out the existing system.”

Similarly points have been made by trade unions. TUC General Secretary Frances O’Grady said that Liz Truss is “making the wrong people pay” for the energy bill freeze. She said, “Freezing energy bills this autumn is essential for families and to protect jobs and businesses.

“But the Prime Minister is making the wrong people pay. She should have imposed a much larger windfall tax on profiteering oil and gas giants. And she should have required all firms getting help with energy bills to commit to no lay-offs for the lifetime of the help, to protect livelihoods.

“And it’s not just energy bills soaring – so she needs to do more to help families get through the winter. That means a real plan to get wages rising, a big boost to universal credit, child benefit and pensions, and a massive rollout of home improvements to cut bills. And it’s time to bring energy retail into public ownership to make sure this crisis never happens again.”

Chris Jarvis is head of strategy and development at Left Foot Forward

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