Free market think tanks have said that the government’s plan to freeze energy bills will be ineffective and does not sufficiently target those most in need of support.
“The energy price freeze is middle class welfare on steroids,” Andy Mayer, CEO of the Institute of Economic Affairs, said.
“It represents a gigantic, untargeted handout to households funded by an increase in debt. It would be better to use targeted welfare and tax cuts to help those who need it.”
The think-tanks also argue the freeze will be unproductive. The lower rate means users will “have little incentive to reduce consumption which could lead to energy rationing and blackouts this winter,” explained Emily Fielder of the Adam Smith Institute.
The Centre for Policy Studies said the cost of the freeze will be “eye-watering”, but it praised the government for “resisting the pressure for a windfall tax that would have damaged the very investment we need to secure energy independence in the long term”.
A more popular aspect of Truss’ energy policy with the free market think tanks is the end of the moratorium on fracking. Mayer said “it could not come soon enough”.
Combined with North Sea oil field exploration and greater investment in renewable energy sources such as nuclear and solar, Fielder believes fracking will allow the UK to be “better able to withstand international energy shocks”.