In the United Kingdom, newly-elected Prime Minister, Liz Truss, addressed the energy crisis as the number one priority in the country.
In an effort to mitigate the cost-of-living crisis, the PM proposed an Energy Bill which she hopes will help businesses and households afford their rising energy bills. She argued that despite the huge financial cost it will impose on the U.K. government, “now is the moment to be bold. We are facing a global energy crisis, and there are no cost-free options. Extraordinary times call for extraordinary measures.”
Under the proposed Energy Bill, a typical household energy bill will be capped at £2,500 annually until 2024, while the energy bill for businesses will be capped for six months.
To limit the amount that customers’ bills go up by, the unit price will be capped, although household energy bills will vary according to how much gas and electricity they use.
The scheme to limit energy costs for businesses will also cover public sector groups like schools and charities, and will remain in place for six months. The scheme will be reviewed in three month’s time “to consider where this should be targeted to make sure those most in need get support.”
There are concerns the measures are not targeted enough, with no additional support for the most vulnerable. Nonetheless, the help will be for everyone in England, Scotland and Wales with equivalent assistance for Northern Ireland.
Ms Truss rejected calls to extend a tax on gas and oil company profits to pay for the package. She said that the state intervention scheme will be funded by government borrowing, noting that the total cost of the support will depend on the cost of energy on the international energy markets, which can be extremely volatile. The government will also compensate energy firms for the difference between the wholesale price for gas and electricity they pay, and the amount they can charge customers.
Ms Truss also outlined plans “to make sure we have security of [energy] supply for the long-term”. This includes the government’s intent to launch a joint scheme with the Bank of England to provide emergency support to struggling UK energy firms.
The energy plan is a huge emergency intervention similar to the pandemic rescue package, and while it will not eliminate the pain in households and businesses, it will lessen it, as the country braces for a reccession in the economy.
Downing Street said the price cap outlined in the Energy Bill would boost economic growth and curb inflation by as much as 5%. The rate at which prices rise is currently at a 40-year high of 10.1%, largely driven by soaring energy prices.
Meanwhile, in Anguilla, the Premier and Minister of Finance, Dr Ellis Webster, has also implemented an economic relief package intended to assist Anguillians through this period of economic hardship.
Dr Webster’s cost-of-living support measures to help households deal with the rising cost of living prices, particularly relating to fuel and food costs, come in the form of EC$1000 energy credits to domestic electricity accounts and one-off grants of EC$500 food vouchers to senior citizens over 69 years.
Parameters of the energy credit programme, outlined by the Premier, indicate that payment would be restricted to accounts designated as ‘domestic’ with consumption over 40 KWH, and would be automatically applied to domestic accounts with consumption between 41-1400 KWHs.
Domestic accounts with consumption over 1400 units would be required to confirm residential/non-commercial status, and persons who are residing in a residential dwelling with incorrect account design must have the account designation reclassified in order to receive credit.
The Government of Anguilla anticipates that over EC$6.1 million in energy credit will be applied to domestic accounts, and an estimated cost of EC$400,000 will be applied to the food voucher programme.
Commenting on the implementation of the programmes, Dr Webster stated: “This is one clear indication of what ‘Growing Sustainably Together’ looks like.
“With the introduction of [the Goods and Services Tax] GST, the Ministry of Finance and by extension my entire Cabinet, cognizant of temporary inflationary pressures, made strides to ensure we are able to reach the masses of affected persons through targeted support measures.
“I am grateful that the Government is in a fiscal position to deliver this crucial support. Government is mindful of both the external factors affecting our economy and our obligations, and we will continue to balance these whilst creating the realities we want for ourselves as a people”.
Recognising that the economic hardship, and the energy crisis in particular, are not over, it is important to note that the U.K. government’s relief package to households extends for two years and relief to businesses extends for six months with plans to review that status in three months. The package also compensates energy firms for the difference between the wholesale price for gas and electricity they pay, and the amount they can charge customers.
The Government of Anguilla’s response, though appreciated, is very limited in that it provides a one-off EC$500 food voucher for senior citizens only, and an EC$1000 energy credit for domestic consumers only – and for a limited two-month period. There is no provision made to assist businesses, or to compensate the electricity provider for the difference between the wholesale price for electricity it pays and the amount it can charge customers – the fuel surcharge.
Elsewhere in the European Union, the German government has provisioned 65 million euro to help millions of German households struggling with soaring prices amid Europe’s harshest energy crunch in decades, and the Dutch government has provisioned 16 billion euro to help its citizens deal with high inflation which includes subsidising food and high energy prices.
