Liz Truss to Freeze Energy Price cap

Liz Truss to Freeze Energy Price cap


Liz Truss, named as the next U.K. Prime Minister, might freeze energy bills until 2024, that is, until the next parliamentary elections in her country.

Moreover, the plan is to freeze the prices for all British households. At least $150 billion will be allocated to implement this plan.

It should be reminded that when Truss was still the head of the British Foreign Office, she stated that if she was elected, she would present a proposed action plan on electricity prices within the first week of her election as prime minister.

Incidentally, at the end of August, the head of the British energy regulator Ofgem, Jonathan Brirley, announced an 80% increase in the maximum allowable electricity bill for consumers from October 1 because of rising world prices. In addition, he warned that prices will only rise soon and called on the government to take urgent action.

In order to avoid a sharp increase in electricity prices in Britain, energy suppliers will now be obliged to charge citizens lower amounts, but the government will guarantee the allocation of funding, which is supposed to cover the difference in price.

It should be noted that energy companies can get these funds as a loan, and after the crisis they can repay the loan by introducing an additional fee, already included in electricity bills. However, according to this plan, the electricity bills in Great Britain will be very high and tangible for the average consumer for a long time to come.

As a way to combat the crisis, the option of providing the so-called point assistance to businesses is also being considered. It should be noted that in this case, there will be no cap on electricity prices for companies, which, of course, increases the risk of bankruptcy for the firms themselves.

As a reminder, the energy crisis continues in Europe, which became particularly acute this summer due to the anti-Russian sanctions and an abnormal heat wave. This is reflected in record-breaking electricity bills. By the end of August, the British residents' debt for electricity reached 1.3 billion pounds, and inflation exceeded 10.1%.

It is noteworthy that amid the crisis the British police are preparing for an increase in crime in the country, including such crimes as theft, car theft, fraud, online crime and even mass protests. It seems that without intervention by the authorities, the country will return to the conditions that led to the famous riots in London in 2011.

Meanwhile, back in March this year the Center for Economic and Business Research in Britain published a report that predicted the risk of the biggest drop in living standards since the 1950s. According to the latest estimates by the Bank of England, this fall the inflation rate could already reach 13%.

In the very near future, the world will see whether the newly elected British prime minister will be able to cope with the growing domestic problems, or whether all the troubles will only be the fault of Russian President Vladimir Putin as many Western leaders, including Liz Truss herself, used to say.

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