The Daily Telegraph

Truss could freeze bills to avoid energy ‘Armageddon’

Foreign Secretary expected to give help to poorest households if she becomes new PM

- By Ben Riley-smith and Tony Diver

LIZ TRUSS is considerin­g freezing energy bills for millions of households this winter if she wins the Conservati­ve Party leadership race today, The Daily Telegraph understand­s.

Campaign sources familiar with discussion­s, and energy company insiders who have been consulted, have said that a freeze in some form is expected.

Shortly after midday, the contest to succeed Boris Johnson will end, with either Ms Truss or Rishi Sunak, the former chancellor, announced as the next Tory leader.

The winner, as chosen by Conservati­ve Party members, will become prime minister tomorrow.

Ms Truss is the clear favourite, having consistent­ly led in opinion polls of Tory members throughout the summer – though both sides insisted last night the result was not a certainty.

Whoever wins, one of their first priorities will be to address the cost of living crisis. In an interview on BBC One yesterday, Ms Truss reassured the public that help was coming if she became prime minister, pledging to announce a support package within a week.

The Foreign Secretary said the rise in energy bills did not have to mean “Armageddon” this winter and declined to rule out a bills freeze for some households. Energy bills for the average family are set to rise from £1,971 to £3,549 from next month, when the change in the price cap kicks in.

Olaf Scholz, the German chancellor, yesterday announced an energy bills relief plan worth about €65billion (£56 billion).

In an interview on Sunday with Laura Kuenssberg, Ms Truss said: “I will act if I’m elected as prime minister. I will act immediatel­y on bills and on energy supply because I think those two things go hand in hand.”

Asked if she would rule out a freeze on energy bills, a policy proposed by the Labour Party and energy companies, Ms Truss declined to do so. She said: “I’m not going to go into details of what a putative announceme­nt would be before [it happens] because I think it would be wrong to do that.”

She added: “I don’t think we should be predicting a sort of Armageddon scenario. I think we are in a good position to deal with very tough challenges.”

Scottish Power has proposed a £100billion plan for a two-year energy bill freeze, financed by loans underwritt­en by the Treasury. The proposal is backed by other energy firms.

One energy company source said the idea has been “extremely actively explored” by Truss campaign figures and that Kwasi Kwarteng, the Business Secretary tipped to become chancellor if Ms Truss wins, appears “very open” to options for a freeze.

A second industry source confirmed the proposal was being scrutinise­d by the Truss campaign.

Insiders in Ms Truss’s team have told The Telegraph the same. One said: “I’m confident there will be a mechanism introduced that freezes bills.” Another said the idea has been discussed in the campaign “quite a lot”.

The specifics of such a freeze – exactly who would benefit, how long it would last, at what price level and the degree to which the taxpayer would cover the cost – remain a point of debate inside the campaign, sources claim.

A Truss campaign spokesman declined to comment.

Ms Truss has faced criticism from Mr Sunak’s allies for saying in a newspaper interview that she would prefer not give “handouts” to solve the cost of living crisis. Throughout the contest she has rejected calls to specify what financial help she would provide, instead pointing to her wider tax-cut promises.

However, there is speculatio­n that her yet-to-be finalised package of energy-support measures, combined with her promised tax cuts, could end up costing as much as furlough, the £70billion scheme that paid the salaries of millions of workers in the pandemic.

One opinion poll found 82 per cent of respondent­s favoured freezing the energy price cap at its current level.

On Sunday with Laura Kuenssberg, Ms Truss was also questioned about her plan to reverse the National Insurance rise, and whether it would benefit higher earners more. She said: “The people at the top of the income distributi­on pay more tax – so inevitably, when you cut taxes you tend to benefit people who are more likely to pay tax.”

But she added: “To look at everything through the lens of redistribu­tion I believe is wrong. What I’m about is growing the economy – and growing the economy benefits everybody.”

‘Meeting is important if she plans to pick up where Mr Johnson left off and change the terms of NI trade’

LIZ TRUSS will fly to America later this month if she becomes prime minister as she seeks to forge ties with Joe Biden’s administra­tion.

Whoever succeeds Boris Johnson is expected to join other world leaders at the United Nations General Assembly in New York, which opens on Sept 13, with general debates from Sept 20 to 26.

Ms Truss accompanie­d Mr Johnson on the trip last year – it was her first overseas visit after he promoted her to Foreign Secretary from internatio­nal trade secretary.

A meeting with President Biden would be expected, though whether she will go to Washington DC is likely to be decided nearer the time.

The severity of domestic challenges the next prime minister faces has become all too clear in recent weeks as the economic situation has deteriorat­ed during the Tory contest.

Inflation could peak at more than 20 per cent. A recession lasting at least a year is forecast. Energy bills are likely to triple, inflicting crippling financial hardship on millions of families and businesses.

There is also the prospect of more public sector strikes, police preparatio­ns for the possibilit­y of civil unrest and soaring NHS waiting lists.

David Davis, the former Brexit secretary and a Truss supporter, yesterday said she would face the most challengin­g domestic in-tray of any new prime minister since Margaret Thatcher. Some commentato­rs have claimed the situation may be even more challengin­g than that faced by Thatcher in 1979.

Yet less attention has been paid to the long list of fraught internatio­nal issues that likely to face the next prime minister, be it Ms Truss, the clear frontrunne­r according to political insiders, or Rishi Sunak, the former chancellor. Ms Truss’s trip to America may be part of the diplomatic calendar – the UN General Assembly takes place every year in late September and attendance in person by the prime minister is expected.

However, it is also strategica­lly important if she plans to pick up where Mr Johnson left off and change the terms of Northern Ireland trade.

Ms Truss has publicly committed to continuing to push the legislatio­n, which proposes to give ministers the power to unilateral­ly suspend parts of the Northern Ireland Protocol through Parliament.

The Bill has triggered fierce criticism from Brussels and words of warning from Democrats in Washington, given that it seeks to unpick an agreement signed off by the UK a few years ago.

The Northern Ireland Protocol agreed to keep the land border between Northern Ireland and Ireland open, with customs checks conducted on goods between the island and mainland UK – effectivel­y creating a customs border down the Irish Sea.

Ms Truss is among those fierce critics of the arrangemen­t, arguing that it undercuts the integrity of the UK as goods cannot flow freely across the country. But the EU is insisting the UK sticks to the deal it approved.

Mr Biden opposed Brexit when he was vice-president at the time of the 2016 EU referendum and bemoaned the result. Since becoming president, Mr Biden has talked of the need to protect peace in Northern Ireland and warned London and Brussels against acting unilateral­ly – as the UK now plans to do via legislatio­n. Senior Democratic

congressme­n have gone further, insisting that there will be no UK-US trade deal if London rips up the terms of the Protocol.

It is likely Ms Truss would use a US visit to attempt to ease concerns about her Brexit approach, perhaps stressing that she, too, wants to protect the peace in Northern Ireland – as Mr Johnson did during his US visit last autumn – while defending the right to act.

There have been media reports that Ms Truss would also visit Ireland, which is potentiall­y a critical broker in the Northern Ireland Protocol discussion­s given its status as an EU member.

Any attempt to soften the stances of world leaders would be complicate­d by Ms Truss’s support base among hardline Brexiteers, whom she courted while seeking support from sufficient Tory MPS to make the final shortlist of two leadership candidates.

Making progress in talks with EU leaders, which have effectivel­y stalled for months, would also face fresh hurdles, given that during one hustings event Ms Truss declined to say whether Emmanuel Macron, the French president, was a friend or foe of the UK. The “jury’s out”, she declared.

Truss allies believe that, despite exchanging heated rhetoric with Mr Macron, she could forge a constructi­ve working relationsh­ip with him and other European leaders because Mr Johnson was seen as the architect of Brexit by many politician­s on the Continent. Ms Truss voted Remain in the referendum, but has become a Brexit convert.

Supporting Ukraine’s resistance against the Russian invasion, a land war in Europe that has lasted longer than six months, will be another pressing foreign policy challenge.

Shoring up resilience among fellow European leaders for standing by Kyiv despite the painful economic knock-on effects of soaring energy costs will be an early priority, as will supporting Ukrainian counter-offensives before the winter.

Ms Truss is also expected to take a tougher stance on China than Mr Johnson. As Foreign Secretary she said its state-owned companies would no longer play a critical role in the UK’S critical national infrastruc­ture.

The clear indication was that in areas such as future nuclear power plants and 5G technology the role of Chinese statelinke­d firms will be scaled back.

 ?? JAMES MANINING/PA WIRE ?? Liz Truss, the Foreign Secretary, is expected to beat Rishi Sunak and be announced as the new Conservati­ve leader this afternoon
JAMES MANINING/PA WIRE Liz Truss, the Foreign Secretary, is expected to beat Rishi Sunak and be announced as the new Conservati­ve leader this afternoon
 ?? ?? Rishi Sunak and Liz Truss, the Conservati­ve leadership candidates, appeared on BBC’S Sunday with Laura Kuenssberg show yesterday
Rishi Sunak and Liz Truss, the Conservati­ve leadership candidates, appeared on BBC’S Sunday with Laura Kuenssberg show yesterday
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