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Energy bill plan: Everything you need to know about today’s announcement and how Liz Truss could help YOU
LIZ Truss today unveiled her radical plans to help Brits pay their energy bills this winter - as prices are set to soar.
Here are all the key points from her first major announcement as PM.
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What is the plan?
From October 1, energy bills for the typical family will be frozen at £2,500 a year under a new Energy Price Guarantee, saving households around £1,000 annually.
The sum includes the current price cap of £1,971, plus the £400 in energy bill rebates already announced by Rishi Sunak when he was Chancellor.
It's down to the unit price of energy being frozen at a set price.
Anything above that will be paid for by the Government.
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The package will last for two years, but could be extended as prices, set to rise to £3,000 in January, are expected to remain high until the end of next year.
Businesses will have a separate six-month scheme offering the same support, as will non-domestic users such as schools and hospitals.
After that there will be ongoing support for the most vulnerable industries, with a review in three months' time to decide where the help should be targeted.
The plan will see the Government limit the price suppliers can charge customers for units of gas, replacing the existing price cap set by regulator Ofgem.
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However, the cap is just on what firms can charge customers. Bills could still be higher, based on energy usage.
The £2,500 guarantee will apply in England, Scotland and Wales from October 1, with the same level of support made available to Northern Ireland, which has a separate energy market.
HOW MUCH WILL YOU SAVE?
THE typical family will pay no more than £2,500 on energy bills - but it depends on how much you use.
Here are the estimates on how the cap will affect YOU:
Detached house
Under October price cap: £4,700
Under new cap: £3,300
Savings: £1,400
Semi detached
Under October price cap: £3,800
Under new cap: £2,650
Savings: £1,400
Mid terraced
Under October price cap: £3,300
Under new cap: £2,350
Savings: £950
Bungalow
Under October price cap: £3,500
Under new cap: £2,450
Savings: £1,050
Flat
Under October price cap: £2,450
Under new cap: £1,750
Savings: £700
What has Truss said?
Ms Truss told MPs during her first PMQs her plan would give worried families and businesses help.
And today she delivered on her promise, vowing: "This is the moment to be bold."
"We are facing a global energy crisis and there are no cost-free options," she added.
Today, the Prime Minister announced:
- A two year price freeze on bills, saving households £1,000
- Support for businesses for at least six months
- Households will still get the £400 rebate on bills this winter
- Millions excluded by the price cap to get support from a new fund
Ms Truss previously 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.
"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."
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Who will it cover?
Ms Truss insisted her plan provides help for families who are worried about the price cap increasing to £3,500 at the start of October.
Under the cap, a family living in a detached house will spend no more than £3,300, a semi-detached £2,650, a bungalow £2,450 and a flat £1,750.
And the package includes help for businesses too - with warnings that seven in ten pubs could close as they can't afford their energy bills.
While it will initially last six months, it can be extended for the most vulnerable industries if required.
Who will pay for it?
Ms Truss previously said she wouldn't support another windfall tax to get the extra money.
But she won't ditch the one that has already been put in place, her spokesperson said yesterday.
And it appears that ministers have ruled out lending the money to banks and then putting a levy on Brits' bills for decades to come.
It's likely that the money will be borrowed - with the Chancellor tweaking fiscal rules to deal with what he will call an emergency situation.
That money will be paid back more slowly over time.
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And the borrowed cash will be rolled into Britain's general taxation bill.
Ms Truss has vowed no "new" taxes while she is PM.
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