The government aimed to raise over three billion euros through a finance bill, proposing an increase in electricity taxes. However, on November 26, the Senate rejected this measure, opting instead to raise the gas tax for a projected 1.2 billion euros in revenue. Critics argue the government’s approach is socially unjust, and the Budget Minister emphasized a commitment to reducing electricity costs by 9% for most citizens, amidst opposition to the proposed tax increases.
Government’s Ambitious Financial Goals
The government aimed to secure over three billion euros through a significant provision in the finance bill. However, on the evening of November 26, the Senate delivered a major blow to Michel Barnier’s administration regarding the 2025 Budget. The Senate took a decisive stand against a crucial measure that proposed to raise electricity taxes beyond the levels observed before the energy crisis.
With a substantial show of hands, lawmakers from both sides—right and left—successfully voted to reject this provision. The government had anticipated that this measure would generate much-needed revenue, but instead, the Senate opted for an alternative approach, opting to increase the gas tax to achieve an estimated gain of 1.2 billion euros.
Concerns Over Social Justice
This rejection marks a notable setback for the government within the Senate—a chamber that generally supports it—especially as calls for censure against the Prime Minister intensify. Socialist representative Thierry Cozic criticized the government’s approach, stating, ‘The government has chosen the easiest route to generate new revenue: by imposing another tax on electricity. This measure is socially unjust.’
Jean-François Husson, the general rapporteur from The Republicans, echoed support for the repeal, connecting it to the planned increase in the gas tax. He argued that this would promote a transition towards decarbonized energy sources like electricity. Husson pointed out that households relying on gas heating could see increases of about ’60 euros per year’ for a typical 100 square meter home, while those using electricity could face losses of ‘200 to 300 euros’ under the government’s proposal.
Government’s Commitment to Reducing Electricity Costs
In its quest for budgetary savings, the government expressed disapproval of this rebalancing. Budget Minister Laurent Saint-Martin stated, ‘We prefer to raise the TICFE (tax on electricity) while maintaining the reduction of electricity bills, rather than increasing the gas tax, which would inevitably raise costs for our citizens.’ He reiterated the government’s pledge to cut electricity bills by 9% starting February 1 for 80% of the French population.
This anticipated reduction stems from declining wholesale electricity prices, allowing the government to propose an increase in electricity tax without imposing additional burdens on consumers. The administration had included a mechanism in its budget proposal that would enable it to adjust this tax to potentially exceed pre-crisis levels. In the Assembly, a coalition of opposition parties, including members from the right, also voted against this measure, even rejecting the entire article concerning electricity taxation. The National Rally has identified this tax increase as one of its non-negotiable conditions in discussions regarding a potential censure of the Barnier government.