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UK PM Liz Truss vows to 'deal hands on' with energy crisis, and will scrap fracking ban

·3 min read

Newly installed U.K. Prime Minister Liz Truss told Parliament on Wednesday that she would tackle Britain’s "very serious" energy crisis while still slashing taxes, ruling out imposing a windfall levy on oil companies to pay for her plans to offset the soaring cost of heating and electricity.

Truss rebuffed opposition calls for a new windfall tax, even as she refrained from explaining how she would fund a plan meant to help the public pay energy bills skyrocketing because of Russia’s invasion of Ukraine and the economic aftershocks of COVID-19 and Brexit.

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She said during her first session of prime minister’s questions that she would set out a plan on Thursday to help with the immediate prices crisis so that people "are able to get through this winter," as well as measures to bolster Britain’s long-term energy security.

But she added: "I am against a windfall tax. I believe it is the wrong thing to be putting companies off investing in the United Kingdom just when we need to be growing the economy.

"This country will not be able to tax its way to growth," she said, to thunderous cheers from Conservative lawmakers in a packed House of Commons.

Truss’s spokesman said she wouldn’t cancel a windfall tax imposed in May by former Treasury chief Rishi Sunak, her defeated Conservative leadership rival, but wouldn’t bring in a new one. She is also scrapping a previously announced increase in corporation tax from 19% to 25%.

Opposition Labour Party leader Keir Starmer said that amounted to handing billions to energy firms that have pocketed hefty profits because of high energy prices. Instead, the cost of price relief will have to be paid by British taxpayers, he said, branding Truss’s economic plans a "Tory fantasy."

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British news media have reported that Truss plans to cap energy bills. The cost to taxpayers of that step could reach 100 billion pounds ($116 billion).

"The prime minister knows she has no choice but to back an energy price freeze, but it won’t be cheap and the real choice, the political choice is who is going to pay," Starmer said. "Is she really telling us that she is going to leave (energy companies’) vast excess profits on the table and make working people foot the bill for decades to come?"

Truss' office said there will be a "bold plan of action" to support households and businesses with soaring energy bills while also seeking to boost domestic energy supply.

"Putin’s war in Ukraine and weaponization of gas supply in Europe is causing global prices to rise – and this has only made clearer that we must boost our long-term energy security and supply." Truss said in a statement Thursday. "We will take action immediately to help people and businesses with bills but also take decisive action to tackle the root cause of these problems, so that we are not in this position again."

LIZ TRUSS REPLACES BORIS JOHNSON AS BRITISH PRIME MINISTER

Although environmentalists have condemned both oil and gas exploration in the North Seas and fracking, Truss declared on Thursday that she promises more North Sea drilling and the removal of the fracking ban.

Fracking was first attempted in the UK in 2011, but was shut down after facing a series of problems, including Earth tremors at its site in Lancashire.

In 2019 the government created an effective moratorium on fracking, saying that only if fracking could be proven not to cause Earth tremors could it go ahead.

In her first speech as prime minister on Tuesday, Truss said she would cut taxes to spur economic growth, bolster the NHS and "deal hands on" with the energy crisis.

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"We shouldn’t be daunted by the challenges we face," Truss said in her speech. "As strong as the storm may be, I know the British people are stronger."

The Associated Press contributed to this report.