Prime Minister's energy statement
This morning, 8th September 2022, the prime minister made her energy statement to the House of Commons.
Domestic supplies will benefit from a price cap averaging £2,500 p.a. for two years from 1st October. This is likely to cost the taxpayer some £150 bn.
As expected, the statement was vague on the commercial sector. Liz Truss announced that business and non-domestic users (charities, schools etc.) will receive ‘equivalent’ support to the domestic market covering the next six months and to be reviewed every three months.
Details of this support will be revealed by the new Chancellor, Kwasi Kwarteng, in the next few weeks. Once this is known we will issue another summary.
There is likely to be a review of electricity generator prices which should bring down the cost of energy. Should there be a suspension of green levies in the non-domestic sector, then any business on a fully pass through contract will see an immediate benefit of this change.
In addition, there will be renewed interest in fracking and an increase in North Sea extraction licences, as well as a promise to invest in renewable technologies. A task force is going to be set up to ensure the Net Zero 2050 target is met in an economically efficient way.