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You are here: Home / News Articles / Sánchez promises to lower taxes to put the brakes on rising electricity prices

Sánchez promises to lower taxes to put the brakes on rising electricity prices


Sánchez promises to lower taxes to put the brakes on rising electricity prices
Pedro Sánchez in yesterday’s interview with TVE

Sánchez promises to lower taxes to put the brakes on rising electricity prices

The Council of Ministers will approve new measures today to try to stop the rise in electricity bills due to the record prices that electricity has been reaching in the wholesale market for weeks now.

The news was broken on Monday night by President Sánchez in an interview with TVE, where he outlined that the suspension of the energy generation tax (7%) will be extended until the end of the year and that special tax will be reduced from 5.1 to 0,5%, “the minimum required by EU law”.

Sánchez added that it is not “acceptable” that electricity companies are reaping “extraordinary benefits”, which is why he also intends to “cap gas bills” before the expected price rise over the coming months. “[Companies] can afford it, here we all have to make an effort,” insisted the president.

In addition, Sánchez pointed out that “a distinction must be made” between the price of energy in the markets – where “no government has the legal capacity to act” – and the impact of the market on electricity bills – where the wholesale price can have an impact of between 20 and 30%.

He also claimed that, until now, the government had tried to lower electricity prices with structural reforms – promoting renewable energy sources, protecting the most vulnerable families by not allowing supplies to be cut off due to non-payment, and reducing taxes such as VAT and generation tax – and has asked Congress to expedite the measures pending parliamentary endorsement.

The rise in electricity has put a strain on the coalition in recent weeks, although this Monday, after Sánchez’s announcement, the Minister of Social Rights and leader of Podemos, Ione Belarra, said that “it is the best news” that the PSOE “has accepted some” proposals from UP. “The government must protect the people from profiteering power companies,” she said.

Finally, Sánchez also referred to the temporary situation of the General Council of the Judiciary, in office since 2018, and urged Pablo Casado to “comply with the Constitution”, facilitate the renewal of the body, and “not speak badly of Spain” when abroad. “We have 1000 days of constitutional insubordination. The PP is blocking the renewal,” concluded the president, who called the PP leader’s demand to change the system of election of the members so that judges elect the members, in line with the EU recommendations, as an “excuse” to maintain the blockade.
SEE MORE:

Spain’s government feels heat over sky-high electricity prices

Published thinkspain.com 16 September 2021

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