After a quiet hiatus due to the sad passing of Queen Elizabeth II, the busy world of politics is expected to make a quick return.
Truss’s new “energy price guarantee” is expected to face scrutiny after it was all but forgotten in the wake of the death of the late monarch.
The “guarantee” is said to limit typical household energy bills to £2,500, and as positive as this sounds, it is a monumental commitment.
The “energy price guarantee” is expected to be the single most costly policy that Britain has ever seen whilst not at war.
With the Treasury leaving a blank cheque for Truss’s gamble it remains unclear quite how much of the taxpayer’s money will be spent on the intervention.
However, economists are already scathing about the potential costs. The predicted expenditure varies from £50Bn to £150Bn based upon wholesale prices.
Paul Johnson, Director of the Institute for Fiscal Studies has said that Truss’s “energy price guarantee” could be “ the biggest fiscal event of his lifetime” and detailed that he wanted the public to know that it meant for every £1 they spent on energy, the government was paying 75p.
Johnson concluded by saying that he found it “deeply disappointing” that the new government took a radical and expensive stray from the norm without even one hint of cost.
So it seems to me that it is a gamble on a policy that will offer short-term assistance for the bill payer, to the detriment long-term of future taxpayers who could be paying off a debt of anywhere between 50 and 150 billion pounds for an undetermined amount of time.
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