Four ways to ease the burden

Total freeze

Freeze bills for all householders at current levels, scrapping the 80 per cent increase due on October 1. Fund this by giving loans to energy retailers to allow them to cover the increase in the wholesale cost of gas and electricity. The full cost to protect householders over the next 12 months could be more than £100billion. In theory, the money would be clawed back through a levy on bills over ten to 20 years. It is not a targeted measure, meaning ning that the richest will benefit from lower energy costs as well as the poorest. The idea is widely supported in the e industry.

Tariff limits

Freeze tariffs at the current level up to a threshold for gas and electricity usage that would cover the basic heat and light needs for a household. Any ‘excessive’ use above this threshold would be charged at much higher tariffs on each unit of gas and power used. On the face of it, this would hit wealthier families with big homes. The cost of freezing tariffs for those who keep to low use of heat and light could be around £40billion. Again it would be funded by government loans with the cost clawed back through bills. But the change would be complex and difficult to implement.

Windfall tax

Freeze bills for at least six months funded by a windfall tax. Labour and the Lib Dems favour doing this but Miss Truss has ruled it out. It has been reported that Treasury officials have produced figures suggesting UK gas producers and electricity generators may make excess profits totalling as much as £170billion over the next two years. These are profits that are purely driven by the impact on wholesale energy prices and an supplies of Russia’s invasion invasi of Ukraine. Excess profits pro are defined by the Treasury Tre as the difference between b the money energy e producers can now expect, versus the total expected based on the outlook for before the invasion. But the Treasury says it does not recognise these figures.

Cash Ca handouts

Grants to all households to cover higher bills with added payments to those on low incomes, such as pensioners. This is the approach adopted by Rishi Sunak when he was chancellor. Which? has suggested the basic figure could be £1,000 but £2,000 for households in need. The cost to the Treasury has been estimated at £47billion. One option would be to make these handouts taxable if they are paid to a higher rate earner.