In breaking news, new Prime Minister Liz Truss has announced that the Government is scrapping the energy price cap. The PM stood up in the House of Commons on Thursday, September 8, 2022 to share the much anticipated news on how the energy crisis would be tackled.
Truss says the Ofgem price cap will be scrapped in favour of a “two year energy price guarantee”. The Government says a typical UK household will pay no more than £2,500 a year on a bill for two years from Saturday, October 1, 2022.
The announcement means that energy bills will be frozen at £2,500 for two years in the run-up to the next general election as families battle the cost-of-living crisis. The energy price cap will be scrapped and replaced with a new “energy price guarantee”, easing pressure on households.
READ MORE: Live updates as Liz Truss to announce new energy bill plan
A scheme for businesses, schools, hospitals, other public organisations and charities will “offer equivalent support” but last for just six months. “Vulnerable” industries will receive longer-term support that will be set out later.
A review in three months will decide which sectors should receive ongoing help.
The Government will wait until an emergency Budget this month to set out how much the vast intervention will cost, but estimates suggest it could be up to £150bn and will be funded by extra public borrowing - piling the cost onto taxpayers eventually.
As anticipated, green levies will be removed from energy bills, saving bill payers £150, but the government says it will continue to fund projects to boost renewables.
Ministers will press on with a £400 bills discount that has already been announced. Together, the moves should mean the amount average households pay is close to the current £1,971 price cap. The Treasury estimates the measures will knock up to 5% off inflation forecasts. The fracking ban will also be lifted - with the Government claiming drilling for shale could start within six months. A new round of North Sea gas and oil licences, due to start next week, could see more than 100 new permissions granted.
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