The more than discreet effect on the electricity bill that is having in its first days of application the gas price limit has fallen like a bucket of cold water on the expectations generated by the Government when it managed to get Brussels to approve the call “Iberian exception”, which was presented as a triumph. The Executive attributes to specific meteorological reasons the fact that the gas cap is barely noticeable in the electricity bill – he estimated a 15% decrease in what subscribers pay at the regulated rate, when in practice it is around 5%– and asks for more time so that this star measure can be assessed in its entirety. However, not even the Government itself seems to give itself the time it is asking for, since it has not let it wait even 10 days to make another announcement: the VAT reduction on electricity, from 10% to 5%.
It is not the first time that it has been lowered, since in July of last year it was already reduced from 21% to 10%. And it also acted on other taxes on the electricity bill, such as the special tax on electricity (IEE), which since September has been at 0.5%, the minimum allowed by European regulations. In addition, it suspended the tax that levies 7% on the value of electricity production (IVPEE). Actions that have not prevented electricity from continuing at unsustainable levels for many consumers and that were at no time the result of a global energy strategy, but rather reactions as the situation worsened. In short, one policy of patchwork and improvisation, in the absence of a stable energy policy. Also the subsidy of 20 cents per liter of fuel had a lot of improvisation and little effectiveness, something that the Government could reformulate next Saturday, to focus on those who need it most. Another measure that would be much more accurate and in tune with the energy transition, if it is finally approved within the anti-crisis package, will be a possible public transport pass.
As for the reduction of VAT on the electricity bill to 5%, it is not expected to be very balsamic (for an average expenditure of about 60 euros per month it will be barely 2.70 euros) and will have a limited duration of only three months, despite the fact that everything indicates that inflation will continue for much longer since the great fear is what will happen after the summer. The VAT reductions, moreover, being generalist, do not focus on the lowest incomes, which is what should be prioritized at the moment, as the IMF recalled. So, it is worth asking why the Government is now making an announcement of these characteristics and including it within a package that will be approved in an extraordinary Council of Ministers. The supposed urgency does not seem such (the scenario has not changed) and when two weeks ago the president of the PP, Alberto Nunez Feijoodemanded to lower the VAT on electricity to 5%, Minister Teresa Ribera then described it as a “cosmetic measure” and “insufficient”. If at that time there were no economic reasons to approve it, perhaps we should look for the political reasons for the sudden change in the Government’s criteria, and more specifically in a attempt to improve the punished image of the PSOE and Podemos after the absolute majority of the PP in the Andalusian elections.
The economic horizon is not easy, and will require more substantive measures than short-term reactions to the political scene. It will require the search for broad agreements, not only with the usual partners of the legislature. Both the parties in government and the main opposition group are responsible for working towards that consensus.