The government will fund the plan to reduce unit energy costs through increased borrowing. The cost is likely to be around £150bn, although Whitehall sources said the estimates would not come until a budget statement from the chancellor, Kwasi Kwarteng, expected later this month. The so-called energy price guarantee will cap the price suppliers can charge customers for natural gas units. Truss will temporarily deduct green levies worth around £150 a year on average from household bills. Its plan will cover England, Scotland and Wales, but something similar is expected to follow in Northern Ireland. Truss also announced programs that will increase energy resilience, including launching a new round of about 100 new oil and gas permits and lifting the moratorium on fracking for shale gas, as well as accelerating new sources of energy supply such as nuclear, wind and solar. The Prime Minister said the average household would save a total of £1,000 from October due to the price cut, on top of the £400 discount previously announced under Boris Johnson. “Earlier this week I promised to tackle the rising energy prices facing families and businesses across the UK,” Truss told the Commons. “And today I fulfill that promise.” He said: “This Government is moving immediately to introduce a new energy price guarantee that will give citizens certainty on their energy bills, curb inflation and boost growth. “This guarantee, which includes a temporary suspension of green levies, means that from 1 October a typical household will pay no more than £2,500 a year for each of the next two years while we get the energy market back on track. “This will save a typical household £1,000 a year. It comes on top of the £400 energy bill support scheme. This guarantee replaces the Ofgem price cap and has been agreed with energy retailers.” For businesses and public sector bodies such as schools and charities, a six-month scheme would offer what it called “equivalent support” to that for households, with a review in three months about how it could be better targeted. Answering for Labour, Keir Starmer again criticized the decision not to extend a windfall tax on energy suppliers’ windfall profits to part-pay for the scheme. “The prime minister is against windfall taxes,” he said. “He wants to leave these huge profits on the table with one clear and obvious consequence: the workers will pick up the bill.” He also condemned the lack of action on home insulation and the focus on oil and gas, saying “doubling down on fossil fuels is a ridiculous response to a fossil fuel crisis”. Starmer said: “I’m afraid fracking and a dash for gas in the North Sea won’t cut the bills. Nor will they enhance our energy security. But they will drive a coach and horses through our efforts to combat the looming climate crisis.” The decision to renew fracking is likely to be controversial. The practice was stopped in 2019 after concerns about the extent of the earth tremors it caused. The government document setting out the energy plan said a delayed report by the British Geological Survey on the impact of the practice would be released on Thursday. Truss also announced a review of the government’s net zero strategy amid the “changing economic landscape”. The review is likely to raise alarm bells from environmental campaigners but will be chaired by Chris Skidmore, who chairs the Conservative MPs’ net zero group and is a key supporter of meeting the targets. Truss told the Commons that “decades of short-term thinking” had failed to secure energy supplies, which she said had been exposed by Russia’s invasion of Ukraine. “I am acting now so that people and businesses are supported over the next two years with a new energy price guarantee and we tackle the root cause of the problems by strengthening our domestic energy supply.” Under the scheme, Truss pledged that households who do not pay directly for gas and electricity, such as those living in park homes or district heating, would not be worse off and said they would receive personal support through a separate fund. . Public sector businesses and organizations were to be offered a new six-month “equivalent support” scheme, which is expected to be an intervention to subsidize the wholesale price of natural gas, but limited details were given about this scheme. Finance ministry officials expect the intervention to reduce projected inflation by about four to five percentage points, which they said will lower debt servicing costs. The plan was described in the Commons as a general discussion rather than a ministerial statement, as is usually the case with such announcements. Before Truss’ speech, the speaker, Lindsay Hoyle, said he was “very disappointed” that details of the plan had not been given to MPs in advance.
