Liz Truss defends plan to lift cap on bankers’ bonuseson September 20, 2022 at 2:31 pm

The prime minister has said that higher energy bills “are a price worth paying” for the UK’s long-term security.

Liz Truss is in New York for the UN General Assembly where she will use her speech to rally support for Ukraine.

Typical household energy bills will rise to £2,500 a year from 1 October, in part due to reductions in Russian gas exports during the war in Ukraine.

Ms Truss said the UK “cannot jeopardise our security for the sake of cheap energy”.

Speaking to BBC Political Editor Chris Mason on her flight to New York, Ms Truss said higher fuel bills were “a price worth paying for Britain, because our long-term security is paramount”.

But she said plans to be outlined later this week would curb future energy bill increases, and “guarantee” that households “won’t have to pay fuel bills that are unaffordable”.

Labour have said plans set out by Ms Truss “will not cut bills, nor will they strengthen our energy security”.

Her opposition to paying for the price cap freeze by extending the windfall tax on energy giants’ profits will “leave these vast profits on the table with one clear and obvious consequence: the bill will be picked up by working people,” the party has said.

She added that the “entire Western world” had become “too dependent on authoritarian regimes not just for our energy supplies, but also for other critical minerals and other goods”.

Ms Truss ruled out rationing energy to deal with rising costs.

Gas and oil prices have spiked since Russia invaded Ukraine on 24 February. Since then Russia has repeatedly shut the key Nord Stream 1 pipeline, cutting gas supply in Europe and further pushing up energy prices.

Even before the Ukraine war wholesale energy prices had been increasingly rapidly before as economies around the world came out of lockdown.

Under her plans, the UK could become a net energy exporter by 2040, she claimed.

A day after becoming prime minister, Ms Truss announced plans to freeze energy bills at £2,500 for the average household for two years.

The scheme is likely to be paid for by increased government borrowing, but the full details will be announced on Friday as part of a mini-budget.

Ms Truss said “not every measure will be popular”.

“What is important to the chancellor, is that people have more opportunities, there is more investment there are jobs with higher wages,” she added.

Chancellor Kwasi Kwarteng is considering lowering taxes and removing a cap on bankers’ bonuses as part of a post-Brexit shake-up of City rules.

Sources say Mr Kwarteng considers it a way of making London a more attractive place for global banks to do business.

Ms Truss said she will use her speech at the UN to try and rally support for Ukraine and ending international energy dependence on Russia.

She pledged to match or exceed the £2.3bn support given to Ukraine over the last seven months.

“Ukraine’s victories in recent weeks have been inspirational,” Ms Truss said.

“Time and time again these brave people have defied the doubters and showed what they can do when given the military, economic and political support they need,” she said.

Ms Truss’ visit to the US is her first foreign trip as prime minister.

She is due to meet with world leaders, including US President Joe Biden and French President Emmanuel Macron.

Ahead of the meeting Ms Truss admitted a new trade deal with the United States is unlikely in the “short to medium term” and that no discussions were currently underway.

The UK government had previously promised a post-Brexit trade deal with the US by 2022.

Ms Truss said she wanted to have a constructive relationship with France and there were a number of issues they need to work together on. She had previously declined to say whether Mr Macron was a “friend or foe” during the Conservative leadership contest.