By Ben Kerrigan-
A typical household will pay no more than £2,500 per year for their energy bills, Liz Truss has announced under “bold” new plans to tackle soaring prices that will come into effect next month.
The government will introduce an “energy price guarantee” in England, Wales and Scotland coming into effect from October 1 – the same date Ofgem was set to lift the price cap by 80%.
Ms Truss said the same level of support will be provided to Northern Ireland, which operates under a different energy market.
The measures will stay in place for two years and the government is to bring forward emergency legislation to get it over the line quickly.
The PM’s plan – paid for by tens of billions of pounds of borrowing – will save the typical household around £1,000 and protect billpayers from further expected rises over the coming months.
In her first major move in the leadership role, Truss announced the typical household “will pay no more than £2,500 ($2,880) per year for each of the next two years,” which the prime minister said will give the average household “a £1,000 saving per year.”
The cap will be in place from Oct. 1.
The new prime minister said there will be an equivalent guarantee for businesses for the next six months. There will then be further support for vulnerable sectors such as hospitality, the prime minister said.
The prime minister also suggested businesses should look at ways to become more energy efficient and look to produce their own energy.
The U.K. will be “a net energy exporter” by 2040, according to Truss’ statement.
Labour leader Sir Keir Starmer said the package was welcome but reiterated that the plan “does not come cheap” and warned “the bill will be picked up by the working people”.
Bill Rebate
Households will still receive the £400 energy bills rebate in six instalments, which was announced by Rishi Sunak earlier this year.
Businesses, schools and hospitals will also receive equivalent support under a six-month scheme over the winter months.
Ms Truss said there will be ongoing support for the most vulnerable industries, with a review in three months’ time to decide where the help should be targeted.
The cap will work by limiting the price suppliers can charge customers for units of gas. Green levies worth around £150 a year on average will be temporarily removed from household bills.
Ms Truss told the Commons: “This guarantee supersedes the Ofgem price cap and has been agreed with energy retailers.”
“This is the moment to be bold. We are facing a global energy crisis and there are no cost-free options,” she added.
Downing Street has refused to put a cost on the programme, previously estimated to cost up to £150 billion. The PM’s official spokesman would only say the price will be “tens of billions”.
Mid-way through the debate, the Labour leader was handed a note and he rushed out of the Chamber.
Shortly after, the prime minister also left.
Ms Truss said the government will set up a fund for those using heating oil, living in park homes or those on heat networks so that all UK consumers can benefit from “equivalent support”.
“We are supporting this country through this winter and next and tackling the root causes of high prices so we are never in the same position again,” she added.
She said the cap on prices will “give people certainty on energy bills, it will curb inflation and boost growth”.
But Sir Keir said her refusal to fund plans with a windfall tax showed she was “driven by dogma” and again accused her of “protecting the excess profits of oil and gas companies”.
He accused her of “handing a tax cut to banks and amazon” while “households need every penny they can get”.
The Labour leader added: ” It’s a very simple question of who’s side are you on?”