It’s heavily rumoured that Liz Truss’s first move as PM will be to freeze energy bills to keep price cap at around the current rate.
A fixed unit price would be agreed to set the rate at which suppliers sell gas and electricity to households, withreporting that the government will ask the energy companies to sign new contracts rather than putting new legislation into place. It’s thought that the freeze could last for up to 18 months, with a separate bailout reportedly planned for businesses.
Truss has ruled out a windfall tax on energy companies to fund cost of living plans ; instead, the plans look set to be funded by the taxpayer over a period of 10 to 15 years, meaning you will likely be picking up the extra cost for at least a decade. It’s not yet clear whether it will be covered by a general tax increase or through a levy or surcharge on bills.
Yes, the price freeze could halt that terrifying 80% October price rise announced by Ofgem last month, but even set at present levels, it still marks a huge increase from last year’s energy costs, and the energy companies will still be guaranteed to profit. Ofgem’s price cap is currently set at £1,971 annually for the average household, while this time last year it was at £1,277 – an increase of around 54%.
That’s a refrain that keeps cropping up. As it currently stands, this plan would disproportionately benefit wealthy people living in large homes, who tend to be the highest consumers of energy, rather than those on low incomes who are more likely to be concerned about the rising price of energy .
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