The Senate inflicted a major setback on the government by blocking a flagship measure of the 2025 budget. The proposal to increase taxation on electricity, beyond pre-energy crisis levels, was rejected.
Electricity taxes: transpartisan opposition against an increase deemed unfair
On November 26, 2024, the upper house rejected by a large majority the idea of increasing the internal tax on final electricity consumption (TICFE). Senators from all sides, from the right to the socialists, denounced a “socially unjust” measure “. Thierry Cozic, socialist senator, insisted: “ The government chose the easy way to find new revenue. »
This rejection calls into question the budgetary strategy of the executive, which was counting on this increase to garner 3 billion euros in 2025. In response, senators opted for an increase in gas taxes, a choice which also provokes criticism.
The senatorial proposal is based on a rebalancing: favoring electricity, carbon-free energy, to the detriment of gas. According to Jean-François Husson, general rapporteur of the draft budget, this approach would limit the increase in bills for homes heated with electricity. A 100 m² house would see a gas bill increase by €60 per year, compared to an estimated loss of between €200 and €300 for electricity if the increase had been applied.
However, the government remains opposed to this alternative. “ An increase in the TICFE would have made it possible to maintain the promise of a 9% reduction in electricity bills for 80% of French people », defended the Minister of the Budget, Laurent Saint-Martin. This reduction in bills is planned for February 1, 2025.
A decision that complicates the task of the executive
This rejection constitutes a hard blow for the government of Michel Barnier, already under pressure in examining its budget. The measure was part of a package aimed at balancing public accounts. With a debt that exceeds 110% of GDP, every euro counts.
The Senate, however, validated other tax measures, such as a tax on high incomes. However, these measures will not be enough to fill the budget hole. Criticism is piling up, particularly from the National Rally, which has made this issue of electricity a “red line” as part of possible government censorship.
As wholesale electricity prices fallthe government wanted to take advantage of this lull to discreetly raise taxes without directly impacting household bills. But the Senate's refusal makes this strategy obsolete.
Between now and February 2025, the executive will have to find other solutions to keep its promise of price reductions while meeting budgetary needs.
