UK New Energy Strategy Announcement Continues to Be Delayed... Prime Minister Johnson and Chancellor Sunak Clash Over Opinions

Boris Johnson, Prime Minister of the United Kingdom
Photo by Reuters Yonhap News

[Asia Economy Reporter Park Byung-hee] Major foreign media reported on the 28th (local time) that the UK government's announcement of a new energy security strategy continues to be delayed. This is due to conflicting opinions between UK Prime Minister Boris Johnson and Chancellor of the Exchequer Rishi Sunak.

Following Russia's invasion of Ukraine, natural gas and crude oil prices have soared, causing electricity bills to spike and increasing the cost burden on UK households and businesses. In response, the UK government is preparing a new strategy to secure energy in a stable manner.

Prime Minister Johnson wants to safely secure electricity mainly through eco-friendly power sources such as wind power, while also increasing the share of nuclear power beyond the original plan. However, Chancellor Sunak refuses additional fiscal spending and insists that more consideration is needed.

As a result, the new energy security strategy announcement, initially expected last week, did not materialize, and the announcement expected earlier this week was also missed. An official said the timing of the announcement this week is uncertain and it could be postponed to April.

Chancellor Sunak is facing heavy criticism for refusing additional fiscal spending. Critics argue that Sunak is not fulfilling his role in helping households struggling with rising living costs due to energy price hikes. There are also calls for the Treasury to increase spending on new nuclear power plants, expanding wind power, and supporting the heavy industry sector.

Last week, Prime Minister Johnson stated that the share of nuclear power in electricity production would be raised to around 25% to secure energy. This requires extending the lifespan of existing nuclear plants or constructing new ones, which necessitates additional fiscal resources. Johnson also said he would advance the energy security strategy to address problems faced by UK industries such as steel.

Rishi Sunak, UK Chancellor of the Exchequer
Photo by Reuters Yonhap News

Chancellor Sunak firmly opposes further fiscal spending, stating that even minor household support should be provided through tax cuts. According to officials, Sunak opposes new fiscal expenditures and believes more time is needed to develop an efficient new energy strategy.

The tax burden in the UK has risen to its highest level since the 1940s. However, the UK government's debt burden is also increasing. The interest on government debt that the UK must pay was ?23.5 billion in the 2020-2021 fiscal year but surged to ?53.5 billion in the 2021-2033 fiscal years. On the 23rd, the UK Treasury submitted its spring fiscal report to Parliament, and Chancellor Sunak appeared before Parliament to present the report. At that time, Sunak revealed that the debt interest payable in the 2022-2023 fiscal year would reach a record high of ?83 billion.

The UK government's new energy security strategy also includes support measures for energy-intensive industries such as steel and chemicals. The UK heavy industry sector says it must spend tens of millions of pounds more due to rising energy prices and is demanding that Prime Minister Johnson take action before the end of March.

The UK government extended its electricity bill support plan for one year until March of this year. The chemical industry estimates that if the support plan is not extended, electricity bills will increase by more than ?27 million this year. In response, Steve Elliott, chairman of the Chemical Industries Association, sent a letter last week to Chancellor Sunak requesting an extension of the support plan.

This content was produced with the assistance of AI translation services.