The heat is on after Liz Truss’s extraordinary energy bill gamble

theguardian.com:

Back in March, just a few weeks into Russia’s invasion of Ukraine, Liz Truss’s future chancellor Kwasi Kwarteng became one of the first cabinet ministers to acknowledge bluntly the costs of the conflict for consumers at home.

“People are willing to endure hardships in solidarity with the heroic efforts that the people of Ukraine are making,” he told MPs. “People understand this in this country, because we’re a generous and giving country.”

He could not have imagined that six months on, the true price of that solidarity would become so unthinkable – with household energy bills set to breach £3,500 – that from his new desk at the Treasury he would be spraying more than £100bn of taxpayers’ money at the energy markets.

Truss’s historic statement setting out an “energy price guarantee”, pegging the bill for a typical household at £2,500, was all but forgotten just hours after she delivered it last week, as political news was silenced by national mourning.

But everything about the announcement was extraordinary. It is likely to be the costliest single policy Britain has ever seen while not at war: a drastic intervention in the energy markets, paid for by taxpayers, for which the Treasury has not yet suggested a price tag.

Yet is being carried out by an avowedly free-market prime minister, who spent much of the leadership campaign attacking “handouts”, and by a party that has spent much of the past decade trying to make sound public finances a key political dividing line with Labour.

And despite the measure’s unprecedented cost, it will still not be enough to protect many households from a grim winter ahead.

“We need a reality check,” says Kate Bell, head of economics at the TUC. “Millions of households still face a huge cost of