Liz Truss to freeze energy bills at £2,500 a year average, funded by borrowing
Liz Truss will freeze energy bills at an average of £2,500 a year for the next two years from 1 October, also pledging to tackle the root causes of the issues in the UK energy market through plans to increase supply, including the resumption of fracking.
The government will fund the scheme to reduce the unit cost of energy through increased borrowing. The cost is likely to be around £150bn, although Whitehall sources said estimates would not come until a fiscal statement from the chancellor, Kwasi Kwarteng, expected later this month.
The so-called energy price guarantee will limit the price suppliers can charge customers for units of gas. Truss will temporarily remove green levies worth around £150 a year on average from household bills. Her scheme will cover England, Scotland and Wales, but something similar is expected to follow in Northern Ireland.
Truss also announced schemes she said would increase energy resilience, including launching a new round of around 100 new oil and gas licences and lifting the moratorium on fracking for shale gas, as well as accelerating new sources of energy supply including nuclear, wind and solar.
The prime minister said the average household would save £1,000 in total from October because of the price reduction, added on top of the £400 discount previously announced under Boris Johnson.
“Earlier this week I promised I would deal with the soaring energy prices faced by families and businesses across the UK,” Truss told the Commons. “And today I am delivering on that promise.”
She said: “This government is moving immediately to introduce a new energy price guarantee that will give people certainty on energy bills, it will curb inflation and boost growth.
“This guarantee, which includes a
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