Thursday 8 September 2022 08:20 AM Truss will unveil £150bn plan to freeze energy bills at £2,500 TODAY trends now
Liz Truss is already facing a make-or-break moment in her premiership today as she unveils a £150billion plan to freeze energy bills.
Getting to her feet in the Commons later, the PM will commit the government to keeping costs for households at £2,500 a year until 2024 - less than half the level many feared they would hit. Including other help most people should see little change from existing bills.
Ms Truss will admit the intervention is on the scale of the response to Covid, insisting the alternative is to stand by and see the economy suffer massive damage.
However, she will also declare that there must be change to ensure the country is 'not in this position again' - with the fracking ban set to be ditched and a new era of oil and gas exploration in the North Sea.
The move will lift the uncertainty hanging over millions of households. The freeze is set to last for at least 18 months and could cost taxpayers anything up to £150billion – more than double the cost of the furlough scheme.
There will also be a package of help for businesses facing catastrophe due to soaring energy costs. The details are not yet clear but it is likely to be in place for less time.
In a round of broadcast interviews this morning, Levelling Up Secretary Simon Clarke said UK plc would suffer “enormous damage” if the Government did not intervene.
But he batted away demands from Labour for a new windfall tax on huge profits being made by energy firms, that it claims could raise tens of billions of pounds.
British Prime Minister Liz Truss holds her first cabinet meeting at the 10 Downing Street in London, Britain, September 7, 2022
Ms Truss will lift the moratorium on fracking in areas where it has community support – ending a ban imposed in 2019
Speaking ahead of the announcement last night, Ms Truss said: 'I know families and businesses across the country are worried about how they are going to make ends meet this autumn and winter.
'Vladimir Putin's war in Ukraine and weaponisation of the gas supply in Europe is causing global prices to rise – and this has only made clearer that we must boost our long-term energy security and supply.
'We will take action immediately to help people and businesses with bills but also take decisive action to tackle the root cause of these problems, so that we are not in this position again.'
The PM confirmed she will 'open up more supply in the North Sea', with ministers expected to issue another 130 licences for drilling and exploration.
North Sea production has already jumped by more than a quarter this year as record prices make it viable to drill in fields previously deemed uneconomic.
The Prime Minister also vowed to press ahead with Boris Johnson's plan to sign off on a new generation of nuclear power stations.
And Whitehall sources said Miss Truss would lift the moratorium on fracking in areas where it has community support – ending a ban imposed in 2019.
'We need to get going on every source of energy supply,' one source said. 'The severity of the challenge means more supply options are on the table and politically palatable.'
Although she had argued against providing universal 'handouts' to deal with the fuel crisis, allies say the severity of the surge in bills forced a rethink.
Privately, ministers acknowledge that the final cost of the energy package is 'unquantifiable' because it will depend on the level of wholesale gas prices.
The plan will involve the taxpayer effectively subsidising the price of energy. Households will pay a fixed rate equating to around £2,500 on an average bill, with the taxpayer bridging the gap with market prices.
The Centre for Policy Studies estimates that funding the freeze would cost £29billion a year if prices stay at the £3,549 level set by the latest price cap.
But the think-tank said this would increase to £81billion a year if prices rise to the £5,387 they are estimated to hit in January.
The cost could jump to a staggering £116billion if gas prices settle at the £6,616 they are forecast to hit next April.
Under Truss' new plan to tackle rising energy costs, households will pay a fixed rate equating to around £2,500 on an average bill, with the taxpayer bridging the gap with market prices
A separate package for businesses could cost another £40billion, although it is expected to last for just one winter.
Ms Truss has said there will also be help for
