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LONDON: Following the freeze on energy bills already promised to households, the British government of new Prime Minister Liz Truss will also pay half of companies’ energy costs this winter, at a great cost, to cushion the price hike.

According to a ministry press release, the government has set a six-month subsidized wholesale price, which, according to a ministry press release, should represent “less than half of projected wholesale prices this winter” for the companies, NGOs and public institutions affected by the measure. relates. on Wednesday Energy and Business.

The aid “will be equal” to the one already announced for private individuals – which limits energy prices for an average household to £2,500 per year for two years, ie a discount of around £1,000 – and includes the removal of certain ecological samples, specifies the executive.

If the amount that will eventually be covered depends on the situation and the contracts of each establishment, this could lead to a reduction of more than 40% of the bill for a cafe or a school, according to government examples.

The mechanism could eventually be expanded and targeted, or replaced by aid targeting the most vulnerable companies or establishments.

Rising energy prices are one of the main factors that propelled inflation across the Channel to its highest level in 40 years, at 9.9% year on year in August, and the executive plans to halt these price hikes that are affecting households and meet companies.

Business applauds. “This has enabled many companies that have risked closing, laying off staff or cutting production to survive the winter,” said Shevaun Haviland, CEO of the UK Chambers of Commerce.

But some “will still struggle to pay their bills” and “six months of support isn’t enough to plan for the future,” she warns.

“It never worked”

Ms Truss will defend her plan for a “more competitive” economy, “that attracts growth by rewarding innovation, investment and business” in New York on Wednesday, where she participates in the UN General Assembly, which is mainly based on on tax cuts.

An approach that was criticized indirectly by US President Joe Biden, even before their bilateral meeting, who said he was “tired of this seeping economy” (wealth drops to the most modest). “It never worked,” he tweeted.

Faced with fears of a recession, the UK government plans to boost growth through total tax cuts, favoring the wealthiest, who pay the tax, rather than the most underprivileged.

The Times newspaper reports a reduction in the tax on real estate transactions, in addition to the already announced social insurance premiums and corporate tax.

According to the British press, consideration would also be given to lifting the caps on bankers’ bonuses, legislation inherited from the EU.

The government will present a “mini-budget” Friday to detail the financing of these measures, which should amount to more than £100 billion.

In fact, between tax cuts and energy subsidies, Barclays economists estimated the figure at more than £200 billion on Tuesday.

This plan is to be financed by borrowing, raising fears of a public finance slippage.

The magnitude of the support seems “almost a panic reaction,” said the director of the think tank Institute for Fiscal Studies (IFS), Paul Johnson, to the BBC on Wednesday. But such measures “were inevitable” in the face of rising prices, he said.

Although government borrowing fell year over year in August after peaking with pandemic aid, it remains very high at £11.8 billion, according to data released on Wednesday. Public debt stands at 96.6% of GDP.

But according to EY Item Club economist Martin Beck, “the significant drop in wholesale energy prices recently indicates that bill freezing could turn out to be cheaper than initial estimates suggested”.

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