Over the next six months, the United Kingdom will lose around £60 billion in subsidies for gas and electricity bills for households and businesses. But, that said, the British Chancellor of the Exchequer, Kwasi Kwarteng.
Taxes are also being lowered to boost the economy.
He emphasized in parliament that the cost estimates of the energy plans are “particularly uncertain” given the strongly fluctuating energy prices. “Based on current prices, the total price of the energy package for 6 months from October is predictable to be around £60 billion,” he said. However, Kwarteng expects costs to fall as negotiations on new long-term energy contracts with suppliers progress.
Prime Minister Liz Truss previously announced a two-year freeze on energy prices. With this step, she wants to prevent more households and companies from getting into trouble due to the sharply increased prices. Similarly, a recession must be prevented or limited in scope.
Kwarteng also said it would waive a corporate tax hike and cut a tax on home purchases, among other changes to the tax system. Kwarteng said it would give the UK one of the world’s most competitive and growth-oriented tax systems.
The minister also announced that a restriction on bonuses for bankers would be abolished. Now bankers in the UK can receive a bonus of up to twice the regular annual salary. The European Union imposed that restriction after the 2008 financial crisis. However, Kwarteng argued that this has only increased base salaries and that banks have moved activities outside Europe.
Truss has pledged to “unleash” London as a financial centre to better compete with business centres such as New York, Singapore and Hong Kong. The British capital should become more attractive to top bankers and stock traders by lifting the cap on bonuses.
Earlier, the ban on extracting shale gas through fracking was also reversed. This method is controversial because chemicals, crushed stone or sand are injected into the soil under pressure to release gas trapped in rock. Fracking has been banned since 2019 due to concerns about the earthquakes it could cause.