Liz Truss energy bills: how has the Queen’s death affected cap plans - when will ‘mini budget’ take place?
Prime Minister Liz Truss announced a major energy bills intervention just hours before Queen Elizabeth II died at Balmoral Castle, Scotland
The UK has returned to regular public life, after the death of Queen Elizabeth II and her subsequent state funeral saw a period of national mourning. This period led to a complete shutdown of politics, as the government had to divert significant resource towards planning the deceased head of state’s funeral.
It meant there were question marks around new Prime MinisterLiz Truss’s energy price guarantee aimed at helping households with energy bills. The plan was announced just hours before the Queen’s death on 8 September.
The main concern was that the suspension of politics would significantly delay Chancellor Kwasi Kwarteng’s emergency budget. This event would lay out how the government plans to pay for what experts say will be a government intervention that costs around twice as much as Rishi Sunak’s furlough package during the Covid-19 pandemic.
So. when will the mini budget now take place? Here’s everything you need to know.
Why is a mini budget scheduled?
When she announced her energy bills support package, Liz Truss has promised her Chancellor Kwasi Kwarteng would outline how the government would pay for the intervention. Her announcement included plans to freeze household energy bills, reverse a ban on fracking and increase oil and gas exploration so the UK can become a net energy exporter by 2040.
It is estimated that these policies will cost a significant amount of money, with the government’s estimate putting the figure at £100 billion and some commentators saying it could be as much as £250 billion. To put these figures in perspective, Rishi Sunak’s furlough scheme during the pandemic cost the public purse around £70 billion.
Given the huge sums involved an ‘emergency fiscal event’ - also known as an ‘emergency’ or ‘mini’ budget - was due to be announced in mid-September.
This type of budget would be a slightly less extensive occasion than a full fat budget because it would not include an assessment of the policy’s impact on the UK’s finances from the Office for Budget Responsibility (OBR) - an independent public body set up by the coalition government. The OBR usually needs 10 weeks’ notice to produce forecasts and analysis for major fiscal policy changes.
Will mini budget still take place?
The Queen’s death has meant there were major doubts about whether the emergency fiscal event can take place before mid-to-late October. The fear was that with Parliament suspended, there would be no fiscal announcement until after the political party conference season - a period that was set to last from Thursday (22 September) until 17 October.
It would have meant the mini budget would have been revealed several weeks after the energy bills plan came into effect at the beginning of October. The PM’s spokesperson had confirmed the plan would be going ahead regardless.
However, we now know the mini budget will be taking place before the plan is enacted as MPs will be made to sit an extra day in the House of Commons. On Friday (23 September), Kwasi Kwarteng will outline how the government will pay for its huge spending plans.
Not only will the fiscal event cover the energy price guarantee, but it will also outline the spending for the following policies the Truss government wishes to implement: