No party in the House of Representatives is against the energy price ceiling, but opposition parties are dissatisfied with the answer to the question of how the costly measure will be paid. Minister Sigrid Kaag (Finance) does not think about spending cuts, but he does not rule it out either. It is not yet clear how much it will cost to cushion the skyrocketing energy bill.
“We agree on the measure,” SGP Congressman Chris Stoffer said of the price cap during next year’s budget debate. But he is “seriously disappointed” that his side of him can now agree on something, but he will only see the consequences in the spring. “That uncertainty is unnecessary.”
The question is where the money should come from. Part of it is covered, as it is called in The Hague jargon. But the total costs are still unclear. This is not surprising, given that gas and electricity prices change every day. If the price of gas rises, it will also become more expensive for the government to compensate.
The bill for the government fluctuates between 10 and 40 billion euros, Kaag thinks. The government hires 23.5 billion euros. These are immense amounts. How this possible setback will be paid will not be announced until spring 2023.
This affected several parts. “If I know there will be cuts or if the minimum wage is not raised, then I am against it,” said PvdA member Henk Nijboer. Less money for, for example, health care or education is out of the question for him. Nijboer may be living with higher government debt or higher taxes for companies and wealthy people.
“The minister asks us for a blank check,” said SP Mahir Alkaya MP. “Excluding austerity would provide some comfort.”
Cutting isn’t a priority, but Kaag doesn’t rule it out
Kaag said he understood the doubts. But the minister went no further than showing understanding. It will only be clear in spring how much exactly the price ceiling will cost and how the economy is doing. Then the cabinet makes a decision.
“I can call it option A or option B very interesting, but then we will have to change it again in the spring,” said Kaag.
The promise of letting the account go into public debt anyway, requested by PvdA and SP, makes Kaag “a little restless”. “I think it’s irresponsible, especially if I don’t know what’s going to happen.”
Kaag made it clear that cuts are “not a priority” for her. But at the same time, she couldn’t “mostly” rule it out. “We have never introduced a price ceiling. This is a unique, extreme situation”, underlined the minister.
Higher public debt or higher wealth tax options
Part of the price cap will be paid with the removal of the discount on energy bills and an additional tax on oil companies benefiting from high energy prices.
For the remaining billions, the government is trying to increase national debt by taxing assets more heavily or an additional “solidarity tax” for fossil companies.
The gas cap is set at 1.45 euros per cubic meter up to a consumption of 1,200 cubic meters. For electricity, up to a consumption of 2,900 kilowatt hours, the price is set at 40 euro cents per kilowatt hour.
