LONDON — The UK’s typical home energy bill will be frozen at £2,500 for the next two years following unprecedented government intervention in the UK’s energy market, Prime Minister Liz Truss has announced.
With consumer and business costs skyrocketing in the wake of the Ukraine war, the government of Britain’s new prime minister wants energy companies to increase unit-by-unit limits what can be charged to
Truss says the plan is projected to save the average household at least £1,000 a year.
However, she declined to specify the total cost of the programme, which is believed to be in the £150bn range. It’s more than double the £70 billion cost of the home sickness scheme.
“Now is the time to be bold,” Truss told lawmakers, stressing that “there are no inexpensive options” for mitigating the impact of the energy crisis.
But the opposition Labor Party has attacked the government for choosing not to fund interventions through a temporary tax on energy producer profits, and energy spokesperson Ed Miliband said the Truss administration was “purely We are against it based on dogma.”
Instead, the Treasury Department has suggested increasing public borrowing, but Truss argued that steps to increase supply could help “cover” the costs of the plan.
House Speaker Lindsay Hoyle has written a ministerial statement warning the government to delay releasing details of the plan, offering limited further information to land after Truss takes a stand in the House.
The government estimates that the scheme, which will start in October, will help curb inflation by up to 5 percent compared to current projections.
Businesses will have the same guarantees for the next six months, but public services such as schools and hospitals will also benefit. The plan builds on measures announced by former prime minister Rishi Sunak in March, but on a much larger scale.
The authorities are working on a comparable scheme for Northern Ireland, which will not be subject to the same pricing system, and a fund to help households without standard gas or electricity contracts.
Truss also announced a number of measures aimed at boosting domestic energy production, including the end of the fracking moratorium and a new oil and gas licensing round starting next week.
Madeleine McTernan, the civil servant in charge of the Vaccine Task Force, will lead a new unit focused on securing Britain’s energy supply.
Conservative MP Chris Skidmore, who heads the net-zero support group in parliament, will implement a reported energy regulation review by the end of the year.
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