After Climate Change, the most pressing need Liz Truss’s government must deal with is the energy crisis and the financial crisis that both families and businesses face.
By the time you read this many of you will have seen what the new Chancellor, Kwasi Kwarteng, is putting on the table. Energy costs must be top of that list. The government will tell you that their package will solve the problem. But the big test has to be who are the winners and losers. As things stand the big losers will be you and me, the public, who will have to pay over the years to come for the support offered this winter. The big winners will be the energy companies.
Without a meaningful windfall tax on their profits, they walk away cash in hand. BP reported its biggest quarterly profit for 14 years, making £6.9bn in the three months to June. Shell recorded profits of £9bn. The majority of those profits won’t be hit by the Government’s windfall tax. Do they need the money for investment? I’m sure they’ll claim they do but both BP and Shell spent billions recently on share buybacks, just to boost their share price. Nice work if the government lets you get away with it.
And of course this right-wing government is flying in the face of the respected Climate Change Committee which has warned that tapping into dwindling domestic gas reserves will have a negligible impact on energy prices. Disastrous for the climate goals we must meet for our children’s future. Businesses will only have a six month scheme offering “equivalent support”.
Local businesses have told me how worried they are, some may close, others lay off staff. Our schools and hospitals will face the same enormous challenge at the end of this six month period. They are already underfunded but it’s pupils and patients who may end up as the losers. As I write it’s not obvious to me that the national burden will fall fairly on those who can afford to pay the most.
Liz Truss is already on record saying that tax cuts for the better off are a good thing because they pay more tax. We know the planned National Insurance cut will go ahead which keeps a lot of money in the pockets of those on high incomes but little for those lower down.
We’ve just been through a period designed to bring the country together. Liz Truss has to prove she heads a government which wants to and will do just that.
This article was originally published in the Rochdale Observer on 24 September 2022.