Truss to cap household energy costs at £2,500
HOUSEHOLD energy bills are set to be frozen at about £2,500 for two winters under a major package to help families through the cost of living crisis.
Liz Truss will cap the cost of gas used for electricity and heating this autumn and keep the support in place for at least 18 months.
The new Prime Minister is set to announce her plan in the Commons tomorrow – and will also use her statement to set out measures to address longer-term energy.
Speaking outside no 10 yesterday, Miss Truss vowed to ‘take action this week to deal with energy bills and to secure our future energy supply’. She said: ‘We will get spades in the ground to make sure people are not facing unaffordable energy bills and we will also make sure that we are building hospitals, schools, roads and broadband.’ Under the plans, energy bills will be capped at £2,500, up from the current cap of £1,971.
This is more than £1,000 below the new energy price cap due to come into effect from October 1, set at £3,549 for an average household. In addition, all households will receive the one-off £400 energy bill rebate announced by former chancellor Rishi Sunak that will begin to be paid from next month.
The total package of support being prepared by Miss Truss is likely to cost £140billion.
As well as helping households immediately, Miss Truss will outline a plan on energy supply to address the root cause of soaring prices. Allies of Miss Truss said successive Governments have failed to properly address the issues, and warned that until it is tackled ‘we’ll just be in groundhog [day] each winter’.
The PM is expected to explore more homegrown energy sources and look at decoupling renewable electricity prices from gas prices. A source said the severity of the challenge faced means that more supply options are now on the table and politically palatable.
Treasury chief secretary Simon Clarke, a close ally of Miss Truss, declined to give details of the package yesterday. But he said: ‘There is a clear commitment to rise to the level of events and to provide early certainty to families and businesses that there will be help available to meet the undoubted challenges that this autumn and winter are going to bring.’
He told BBC Radio 4’s Today programme: ‘It will be a major moment, I think, in terms of drawing a line under the sense of uncertainty which undoubtedly is present in the country at this time.’
Top European markets made gains yesterday amid reports of the support package, indicating that investors now have a more positive outlook on consumer spending power in the coming months.