PM’s energy price plan ‘will load debt onto our children’ says First Minister

The Prime Minister’s decision not to impose a windfall tax on energy companies will load the debt onto our children, First Minister Mark Drakeford has said.

Energy bills for the average household will be frozen at no more than £2,500; the Prime Minister’s two-year plan paid for by tens of billions of pounds of borrowing will save the typical household around £1,000 from October and protect billpayers from further expected rises over the coming months.

Speaking in Cardiff’s Cathays Park today, Mark Drakeford said “the certainty and relief from the announcement” would be welcomed, but added: “But to be clear, this does nothing to help families with the general cost of inflation in food inflation or the other prices that are rising. 

“It offers nothing further to help families with the very steep increase in energy prices that has already taken place from April of this year. It provides no clarity so far on how the package of help is to be paid for. 

“I want to say again, that the right way to pay for the costs of energy in households and businesses is to levy a windfall tax on the excess profits of those companies who are making excess profits out of the energy crisis.”

On the Prime Minister’s decision not to go with a windfall tax, he said: “She wrongly believes that the taxpayer should go on paying this bill for years and years to come, loading the debt onto children and people who come after us. That’s not the way I think of the economy, nor do I think it’s the way that people in Wales would think of it either.”

Welsh Conservative leader Andrew RT Davies MS welcomed the Prime Minister’s announcement.

“I am glad to see that the Truss Government is already taking action days into taking office so that households and businesses can have certainty and support in the face of rising energy costs, the blame for which lies squarely on Putin’s war in Ukraine and the Covid pandemic.

“While it may be difficult for many to accept the need for such large-scale intervention, we have to remember that this kind of pressure on incomes from a singular source is virtually unprecedented and that there is no functioning market in which people can shop around for deals.

“Moving forward, we need to maintain the ambition to make the UK more self-sufficient in energy production and avoid a repeat of this situation, which is why I am pleased to see plans to expand our nuclear power capabilities, maximise North Sea oil and gas, and further invest in renewables.”

Struggling

Luke Young, assistant director of Citizens Advice Cymru said: “Households in Wales have been struggling for months. Across our services, requests for food and fuel crisis support have remained at record highs. We must not lose sight of the fact this will still be a difficult winter for low income and vulnerable households.

“The UK Government must move swiftly to ensure people – particularly those off grid and on heating oil – feel the benefit of today’s announcements, and the Welsh Government must focus relentlessly on getting the Wales Fuel Support Scheme and other payments out to those eligible.”

Becca Lyon, head of child poverty at Save the Children warned it would not prevent some families reaching crisis point.

“With the cost of food skyrocketing, and childcare bills also going up, families battling on low incomes have already hit an absolute limit. Capping energy prices does not acknowledge the additional costs families face. How can it be right that multi-millionaires will get the same support as the most vulnerable families?  

“If there is enough money to pay the energy bills of the rich and not ask energy giants to pay a penny more, surely there should be enough money to make sure no family has to choose between heating and eating this winter.  

“The Prime Minister needs to deliver a plan that provides targeted support to families on low incomes who are juggling big bills on all fronts. The best way to do this is by putting more money into Universal Credit – this should be done immediately.”