Liz Truss will set out a plan to save households and businesses from financial ruin as a result of soaring energy bills tomorrow.
At her first Prime Minister’s Questions, Ms Truss confirmed her plan, expected to freeze household bills at around £2,500, will be set out in Parliament.
But she rejected the idea of using a windfall tax on the bumper profits made by oil and gas giants to fund the package, reported to cost up to £150 billion.
Ms Truss told the Commons: “I will make sure that in our energy plan we will help to support businesses and people with the immediate price crisis, as well as making sure there are long-term supplies available.
READ MORE: Everything Liz Truss has said about energy bills help and cost of living
“I understand that people across our country are struggling with the cost of living and they are struggling with their energy bills.
“That is why I, as Prime Minister, will take immediate action to help people with the cost of their energy bills and I will be making an announcement to this House on that tomorrow and giving people certainty to make sure that they are able to get through this winter and be able to have the energy supplies and be able to afford it.”
In response to Labour leader Sir Keir Starmer, who has pushed for a levy on the £170 billion of “excess profits” that oil and gas producers are expected to enjoy over the coming years, Ms Truss rejected a windfall tax.
“I am against a windfall tax, I believe it is the wrong thing to be putting companies off investing in the United Kingdom just when we need to be growing the economy,” she said.
Sir Keir Starmer said there was “nothing new” about Ms Truss who “nodded through every decision that got us into this mess”.
He said: “The Prime Minister claims to be breaking orthodoxy but the reality is she’s reheating George Osborne’s failed corporation tax plans, protecting oil and gas profits and forcing working people to pay the bill.
“She’s the fourth Tory Prime Minister in six years, the face at the top may change but the story remains the same.
“There’s nothing new about the Tory fantasy of trickle-down economics, nothing new about this Tory Prime Minister who nodded through every decision that got us into this mess and now says how terrible it is, and can’t she see there’s nothing new about a Tory Prime Minister who when asked who pays says ‘it’s you, the working people of Britain’?”
To cheers, Ms Truss countered: “There’s nothing new about a Labour leader who is calling for more tax rises. It’s the same old, same old tax and spend. What I’m about is about reducing taxes, getting our economy growing, getting investment, getting new jobs for people right across the country.
“I’m afraid (Sir Keir) doesn’t understand aspiration, he doesn’t understand opportunity, he doesn’t understand that people want to keep more of their own money and that is what I will deliver as Prime Minister. I will take immediate action to help people with their energy bills but also secure a long-term energy supply. I will take immediate action to make sure we have lower taxes and we grow the economy, and that way I will ensure we have a positive future for our country and we get Britain moving.”
Reports energy bills to freeze
Currently, Ofgem’s household energy price cap is set to rise from £1,971 to £3,549 per year for the average household from October. However, yesterday a government source reportedly confirmed a suggestion in the Times that bills will be capped at £2,500 and the £400 will still be taken off.
With the rebate, it means that many households will end up paying just over £2,000 a year on the energy bills - £1,500 less than the October forecast but still over double the prices at the start of the year.
Many expect the government to borrow at least £100bn to fund the price freeze, as Ms Truss also attempts to push through a promised £30bn of tax cuts.
Paul Johnson, director of the Institute for Fiscal Studies, told the BBC's Today programme: "The big question here is: 'Is it going to be £100bn? What is the exit strategy from supporting bills?'
"My guess is it might end up being an awful lot more than that unless we react quite quickly to make it a better [energy] system," he said, adding that the move would benefit affluent people more than the less well off.
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