The new Prime Minister of the United Kingdom, Liz Truss, has today set out a major plan for tackling soaring energy bills across the country that will limit the amount households pay in energy bills.
Ms Truss, who was announced as the new Conservative Party leader and Prime Minister on Monday - replacing the outgoing Boris Johnson - spoke in Parliament today to unveil the plan. Many believe this could already be the defining moment of her premiership.
Her plan will see the Ofgem price cap replaced with a 'two-year energy price cap guarantee.' This will see a typical UK household pay no more than £2,500 per year on energy bills for two years from October 1.
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In August, energy regulator Ofgem announced that the energy price cap would increase by 80% in October to £3,549 a year for an average household. The news sparked panic across the country and calls for immediate government intervention. It had been predicted that the cap would continue to rise sharply and could reach £6,616 by next April.
Under the plans announced today by Ms Truss, the energy price cap will be scrapped and replaced with a new 'energy price guarantee', which she said will ease the pressure on households. A scheme for businesses, schools, hospitals, other public organisations and charities will 'offer equivalent support' but last for just six months. 'Vulnerable' industries will receive longer-term support that will be set out later. A review in three months will decide which sectors should receive ongoing help.
The Government will wait until an emergency Budget this month to set out how much the vast intervention will cost, but estimates suggest it could be up to £150bn. It will be funded by extra public borrowing - piling the cost onto taxpayers eventually.
Let us know what you'd like at the top of Liz Truss' to-do list here.
The Government will also remove green tax levies, worth £150, from energy bills but say they will continue to fund projects to boost renewables. Ministers will press on with a £400 bills discount that has already been announced.
Together, the moves should mean the amount average households pay is close to the current £1,971 price cap, which rose last April. The Treasury estimates the measures will knock up to 5% off inflation forecasts.
Ms Truss told the House of Commons today that "this is the moment to be bold", adding that there are "no cost free options" to dealing with the global energy crisis.
In another measure, the fracking ban will also be lifted - with the Government claiming drilling for shale could start within six months. A new round of North Sea gas and oil licences, due to start next week, could see more than 100 new permissions granted.
Labour has criticised Ms Truss for choosing not to fund the huge costs of this via a windfall tax on energy companies and their huge profits. At Prime Minister's Questions yesterday, Labour leader Sir Keir Starmer said it was unfair to land the bill for this intervention on the public purse and suggested it will ultimately be paid for through spending cuts or general taxes on the public.
He referred to Treasury figures which suggest energy companies could rake in excess profits of £170bn over the next two years because of the sudden rise in global gas prices. He said: "Every pound of excess profits she chooses not to tax is another £1 of excess borrowing which working people will have to pay."
Reiterating that point in the debate today, Mr Starmer said the the major political choice is about who pays for this huge intervention. He added: "She wants to leave these vast profits on the table, with one clear and obvious consequence - that the bill will be picked up by working people."
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