Another neighboring country has launched a support program against widespread electricity and gas costs for homes and businesses. Britain is buying loans to force spending cuts on British households over two years. Companies should also be supported and gas and oil production in the North Sea should be stimulated.
Already in July and now in September, eight million low-income families have received 650 British pounds (about SEK 8,100) each through a “living cost support package”.
In addition, additional support for increased living costs has been implemented, including a lump sum of 400 pounds (about 5,000 SEK) per household to mitigate rising energy costs.
Now comes more long-term support, which reduces energy costs so that an average household pays no more than £2,500 (SEK 31,250) a year for its electricity and gas. The correct amount is influenced by electricity and gas consumption.
This support is valid for two years. With the subsidy, energy costs for the average household could double. Without support, it is estimated to be three times that.
Called “The Liz Truss energy plan”, this support comes into effect from October 1 this year. There’s still some uncertainty about how the plan will work for people on fixed-rate contracts, oil burners, people living in mobile home parks where energy is included in the site rent, and more.
Support for businesses
Companies and public institutions also need support to cope with sharply increased energy costs. The support program for companies is estimated to cover 100 billion pounds (about 1,250 billion SEK). The exact design of support for organizations is still unclear. The plan is to apply for six months and review after three months to provide better benefits to those who need it most.
A huge burden on state finances
The cost of “The Lis Truss Energy Project” is estimated at 150 billion pounds, approximately 1,875 billion Swedish kroner. The aid package is a gamble because there is no limit to how much it will cost the British government. It all depends on how high energy prices are over the next couple of years.
Increase oil and gas production
Early next week, Britain will hold a new auction for exploration licenses for gas and oil in the North Sea in a bid to boost production.
Article published on Sunday, September 11, 2022
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