Business Maverick: Truss earmarks £130-billion to keep UK energy bills below £2,000

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Incoming Prime Minister Liz Truss has drafted plans to fix annual electricity and gas bills for a typical UK household at or below the current level of £1,971 (R39,022).

In discussions with her team and government officials in recent days, Truss has settled on a mechanism that will avert the massive increase in energy bills that is due to kick in at the start of next month under the existing pricing system, according to officials and advisers to Truss who were briefed on the plan. The policy could cost as much as £130-billion over the next 18 months, according to policy documents seen by Bloomberg.

Truss is due to travel to Balmoral Castle in Scotland on Tuesday to meet Queen Elizabeth II before officially taking office as the successor to Boris Johnson as British prime minister. She’s under pressure to come up with a solution to surging energy prices that are crushing families and businesses in the UK as Russia shuts off gas supplies to Europe in response to the sanctions imposed following its invasion of Ukraine.

Under Truss’s plan, energy suppliers will be obliged to charge households a reduced rate for their energy and the government will guarantee financing that will cover the difference with what they would have charged under the previous system, according to documents seen by Bloomberg. During the campaign to lead the governing Conservative Party Truss had already pledged to remove a green levy of about £150 a year from bills while the previous administration had promised another £400 in government subsidies to help families. Added to the new aid package, the average household will effectively see their bills frozen, the officials said.

 

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