Truss plans ‘bold’ energy freeze for business and consumers
Truss is expected to announce a cap to the cost of gas used for electricity and heating, which would commit the government to paying the country’s energy bills above a certain point to stop widespread insolvencies and hardship.
Pubs and restaurants have said they face financial ruin because they have no protection from soaring energy prices, with some facing a seven-fold increase.
Government intervention
Under the plans, the Government would directly intervene in the wholesale energy market, subsidising the cost of gas being bought by electricity generators and suppliers.
Consumers and businesses would have certainty over the cost of power this winter - however, the taxpayer would take on the risk of surging wholesale gas prices.
Sir Iain Duncan Smith, a key Truss ally, told The Times: “I do know that she is going to do something big and bold and it’s going to be getting the money to everybody.”
Future expectations
Industry experts believe the scheme will cost at least £60bn a year, which could rise if Russia fails to restore gas supplies to Europe via the Nord Stream 1 pipeline this winter.
Yesterday (Monday 5 September) wholesale gas prices rose 10% on Friday’s close after Russia said that full operations would not resume until the “collective West” lifted sanctions.
Kwasi Kwarteng, who is expected to become Truss’s chancellor, has said that the Government will offer support for families and businesses “through this winter and the next”.
