Wednesday, September 07, 2022

UK PM rules out windfall tax to fund energy price freeze

Issued on: 07/09/2022 -

Liz Truss on Wednesday faced her first parliamentary grilling as British Prime Minister, ruling out a windfall tax to fund any freeze on energy bills to offset huge rises in the cost of gas and electricity. Truss, who formally took over from Boris Johnson on Tuesday, said she would spell out her plans on Thursday for an economic support package to forestall a growing crisis in the months ahead. FRANCE 24's Bénédicte Paviot reports from London.

New UK PM Truss wants more oil and gas extraction from the North Sea



Issued on: 07/09/2022 - 
Video by: FRANCE 24

Britain's new prime minister, Liz Truss, said on Wednesday she wanted to see more extraction of oil and gas from the North Sea and more investment in nuclear power. Speaking at her first prime minister's question time in parliament, Truss said she wanted to find ways to address rising energy costs for businesses.
  • No 10 hinted that the ban on fracking will be lifted this week. During the leadership contest Truss said: “I support exploring fracking in parts of the United Kingdom where that can be done”. Asked if the fracking ban would be lifted this week, the press secretary would not comment on the announcement tomorrow, but he said Truss made her views clear during the campaing. This is from LBC’s Ben Kentish.

PMQs - verdict from Twitter commentariat

13:59

And this is what other journalists and commentors are saying about PMQs. Mostly people were just glad to hear the two main party leaders have a proper argument about policy.

From my colleague Rafael Behr on PMQs.

From Global’s Lewis Goodall

From my colleague Nesrine Malik

From the New Statesman’s George Eaton

From Global’s Jon Sopel

From my colleague John Crace

From Sky’s Sophy Ridge

From the Sun’s Harry Cole

From the Mirror’s Kevin Maguire

From the FT’s Robert Shrimsley

PMQs - snap verdict

13:50

Every former prime minister says that taking PMQs is the most scary ordeal of the week and, even after 10 years in post, people like Margaret Thatcher and Tony Blair regarded it as one of the ultimate challenges of the job – an encounter when a few wrong words could spell disaster. For any new prime minister, the first question is, are they up to it? And Liz Truss clearly is. She looked like a prime minister, she performed reasonably well, and she even managed a decent joke (on Labour leaders and north London – see 12.20pm.) It was not a triumph, but it was not a catastrophe either, and on day one that is a bonus.

Truss also marks a very welcome change from Boris Johnson, in that (for the most part) she was willing to answer questions, and engage in an argument about policy and ideas. This, of course, is what is meant to happen. But for the last three years we have been governed by a prime minister much more interested in politics as performance and entertainment, and so it is refreshing to tilt back to ideas.

But that is where the whole encounter was less positive for Truss. She won the Conservative leadership contest on a low-tax, small-state agenda that put her well to the right of any Tory leader for a generation. Truss has always been a libertarian (it’s why she joined the Liberal Democrats at university), but during the summer it was never entirely clear to what extent she was just pandering to her party’s cruder, Thatcherite instincts. But now we know; it’s worse than that (to quote an old Westminster joke) – she really does believe it.

Starmer exposed this clearly with questions that illuminated what may become the key dividing line in British politics. Truss has already shifted on to Labour territory by conceding the need for a price cap of some sort on energy bills. But while Labour is proposing to fund this through a windfall tax, Truss is resisting this and today she dug in firmly on this point, declaring categorically that a windfall tax would be wrong. Starmer said this was prioritising the interests of an industry making £170bn in profits and that as a result she was going for “more borrowing than is needed”, with taxpayers paying the price for years to come.

Maybe you can win a general election on this sort of purist, ideological Laffer curve worship? But it seems extremely unlikely. Tories like Rishi Sunak believe the claim that tax cuts alone will always promote growth is nonsense, and even figures in the energy industry are finding it hard to justify their excessive profits. Starmer did not put on a particularly flashy performance, but he sounded much closer to where the public opinion is on these issues and ultimately that is what matters.

Truss also had no convincing answer to the question posed to her by several MPs: how could people trust her to sort out the nation’s problems when she had been in government for the past 10 years? (Boris Johnson did not have this problem, because he was out of parliament for most of the David Cameron era, and he resigned from Theresa May’s government.) Starmer summed this all up in his final question. He told Truss:

The prime minister claims to be breaking orthodoxy but the reality is she’s reheating George Osborne’s failed corporation tax plans - protecting oil and gas profits and forcing working people to pay the bill.

She’s the fourth Tory prime minister in six years - the face at the top may change but the story remains the same.

There’s nothing new about the Tory fantasy of trickle-down economics, nothing new about this Tory prime minister who nodded through every decision that got us into this mess and now says how terrible it is, and can’t she see there’s nothing new about a Tory prime minister who when asked: who pays? says: ‘It’s you, the working people of Britain’?”

In response Truss said there was “nothing new about a Labour leader who is calling for more tax rises” and that Starmer was just offering “the same old tax and spend”. It demonstrated that she can think on her feet, but that won’t help much if voters conclude that what Starmer is saying makes more sense.


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Liz Truss accused of seeking to evade scrutiny over announcement of energy bills plan – live (msn.com)

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