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UK Breaks November Borrowing Record In Attempt To Ease Energy Bills

The UK’s public sector had to borrow $26.6 billion (£22.0 billion) in November, more than double compared to the same month last year and the highest November borrowing since monthly records began in 1993, the UK Office for National Statistics said on Wednesday, as the government is supporting households and businesses hit by the surge in energy prices.

The public sector spent more than it received in taxes and other income last month, requiring it to borrow $26.6 billion (£22.0 billion), which was $16.8 billion (£13.9 billion) more than in November 2021, and the highest for any month of November on record, the Office for National Statistics said.

The UK started making payments under its energy support package schemes in October 2022. To date, the government has paid $4.6 billion (£3.8 billion) under The Energy Bills Support Scheme (EBSS).

During the same month, the UK government also began making payments under the Energy Price Guarantee (EPG) for households and the Energy Bill Relief Scheme (EBRS) for businesses across the UK. These payments are recorded as subsidies but at this stage, they are initial indicative estimates, which will be revised over the coming months, the Office for National Statistics said.

In order to raise more money for energy bills relief, the UK government introduced this year a windfall tax on the profits of UK North Sea oil and gas operators.

Last month the UK raised the windfall tax by 10 percentage points to 35% from January 1, 2023, while also expanding the tax to include low-cost electricity generators. The government expects the Energy Profits Levy on oil and gas firms to raise over £40 billion ($48 billion) by the fiscal year 2027-28.

The new temporary 45% Electricity Generator Levy, which will be applied to the extraordinary returns being made by electricity generators, will be introduced from January 1, 2023, and is forecast to raise around $17.2 billion (£14.2 billion) by 2028.

By Tsvetana Paraskova for Oilprice.com

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