By Connor Steel
LIZ TRUSS has announced a limit on planned energy bill increases for all households until 2024 in her bid to prevent widespread hardship across the UK, using a short statement in a busy House of Commons chamber last Thursday (08/09) to address MPs in a speech soon overshadowed by Her Majesty the Queen’s passing.
A huge support scheme was confirmed by the new Prime Minister following the damaging planned increases of the energy price cap; the highest amount that suppliers are permitted to charge households per unit. From October 1 this figure was set to rise to a total of £3,549 per annum, or an average monthly figure of £295.75.
But the typical household energy bill will now be capped at £2,500 annually until 2024; this support set to be costing approximately £150 billion to implement. However Ms Truss ultimately refused to offer any accurate numbers under cross-examinations from MPs, stating: “extraordinary times call for extraordinary measures”.
Government borrowing will fund this latest state intervention which joins others earlier this year, adding to the UK’s debt racked up during the Covid-19 pandemic. And the cost could increase depending on energy prices on international markets, which have been extremely volatile given the ongoing Russian invasion of Ukraine.
This support will be given to everybody in England, Wales and Scotland alongside equivalent assistance for those in Northern Ireland. Similarly businesses will see a price cap for six months until April 2023, which has seen criticism from many as they hoped for a longer period of financial protection from Government officials.
It has since been confirmed that this business energy price cap will also cover all crucial public sector groups like schools and charities. A statement also clarified that although it will last for six months, this will be looked upon in December “to consider where this should be targeted to make sure those most in need get support”.
Concerns have also been raised that the measures are not targeted enough and offers no additional support for the most vulnerable aside from cost of living payments of £650 announced by Rishi Sunak. Consequently fuel poverty is potentially going to affect millions this upcoming winter including the elderly and family groups.
The Government have announced that they will compensate most energy firms for differences between the wholesale price for gas / electricity paid and the amount they can charge customers. However Ms Truss also rejected calls to place a windfall tax on gas and oil company profits to pay for the new package of support.
Labour leader Sir Keir Starmer said refusals to fund it with windfall taxes showed she was “driven by dogma” and “it’s working people who will pay for that”. Liberal Democrat leader Ed Davey accused Tory ministers of creating a “phony freeze” while “refusing to properly tax the eye-watering profits of oil and gas companies.”
In a feisty exchange Ms Truss argued it was “the moment to be bold” and that “We are facing a global energy crisis, and there are no cost-free options”. Downing Street also said the new price cap would boost economic growth and curb inflation by as much as 5%, a figure currently sitting at 10% driven by soaring energy prices.
In the same statement Ms Truss further outlined plans to protect energy supply for the longer term, including pursuing new oil and gas exploration licences for the North Sea. A controversial lifting of the ban of fracking would also apply, with further information available to read via the available link from BBC Business pages.
A mini-budget is also likely to take place before September 23, but the exact timing hasn’t been announced due to a Parliamentary pause on urgent political related statements or debates due to the Queen’s death. It is unlikely to be delayed as a result of a month-long party conference season due to start on September 24.
PICTURED BY ALAMY (KC28C6): Energy prices are set to be capped at £2,500 per household after Prime Minister’s recent announcement, which came last Thursday morning (08/09) to a busy House of Commons.