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Liz Truss caps energy bills at £2,500 until 2024
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After a summer of navel gazing and infighting, the Tories have finally chosen their new leader, and decided to bring an end to the worst timed unofficial sabbatical ever, and actually do some governing.
Liz Truss is the new leader and therefore prime minister, as we all know by now, and upon becoming PM she promised she had a plan to deal with the issue that's been on everyone's lips - the soaring cost of energy.
Today, she made good on her promise to announce her plan and came to the commons to announce it, take questions from MPs and pat herself on the back for all her amazing ideas.
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But what did she say? And is the plan any good or should we all be learning to knit thermal jumpers this winter and running around unplugging devices as if playing a deranged game of Whac-A-Mole?
Here's everything you need to know about the announcement
Energy price cap
Energy price cap explainer: Why are energy bills rising by £693 per year?www.indy100.com
Here's the headline news. Truss said she will cap energy bills so a typical household will pay no more than £2,500 a year for energy bills until October 2024.
It was expected that bills would rise from £1,971 to £3,549 in October, so now that is ruled out.
Truss said this will save typical households £1000 a year, and that this will come on top of the £400 the government last year announced it will send to households to soften the blow to their bank accounts.
Support for businesses
Truss said businesses, charities and schools and other non-domestic properties will have similar support for six months from October, with a review after three months to target subsequent payments on those most at need.
Fracking
Truss said she is lifting the moratorium on fracking for shale gas, a practice which was stopped in 2019 because of concerns it caused earth tremors, and is also looking into other new energy sources like nuclear, wind and solar.
She also announced a new round of around 100 new oil and gas licences.
Truss spoke about the importance of increasing supply in the long term to keep prices down. "It is vital that we take steps to improve our global energy supply," she said.
Net zero
Truss also announced a review of the government’s net-zero strategy, under the “altered economic landscape”. The review will be chaired by Chris Skidmore, who chairs the net zero group of Conservative MPs.
Funding
The cost of the plan is likely to be around £150bn, but the chancellor Kwasi Kwarteng will give a statement outlining it in full later this month.
Once again, Truss ruled out the prospect of a windfall tax on businesses' excess profits, the strategy preferred by Labour. "We will not be giving in to the leader of the opposition who calls for this to be funded by a windfall tax,” she said.
“That would undermine the national interest by undermining the very investment we need to secure home-grown energy supplies."
Energy Supply Taskforce
A new Energy Supply Taskforce, led by vaccine task force director general Madelaine McTernan, has begun negotiations with suppliers to agree to long-term contracts to reduce the price of energy and increase security of supply.
The taskforce will also negotiate with renewable producers to reduce the prices they charge, which are currently pegged to the far more expensive gas.
What do people make of her plan?
Truss's plan has been criticised by a number of commentators, both for not going far enough in supporting people with huge bills and because of how she is funding her plan.
Labour had proposed freezing prices at their current level of £1,971 for an average household. Leader Keir Starmer said: "Under our plan not a penny more on bills, under this plan a price rise."
“This support does not come cheap. The real question is, who is going to pay?”
He added: “The prime minister is opposed to windfall taxes. She wants to leave these vast profits on the table, with one clear and obvious consequence – the bill will be picked up by working people.”
The Liberal Democrats have accused the Conservatives of bringing in a “phony freeze” on energy bills – pointing out that £2,500 will be double the £1,277 cap was for last winter.
“This phony freeze will still leave struggling families and pensioners facing impossible choices this winter as energy bills almost double,” said leader Sir Ed Davey, who said struggling families would still see their energy bills rise “by another £500 next month”.
Calling for an expanded windfall tax, he added: “Liz Truss and the Conservatives are choosing to allow this huge hike to people’s heating costs, while refusing to properly tax the eye-watering profits of oil and gas companies.”
Andy Prendergast, GMB National Secretary, said:
“It is a stain on this Government that our nation’s energy supplies are in such a vulnerable state.
“The Tories have been in office for 12 years; their failures to build new nuclear power stations, to protect and utilise our gas storage capacity and willingness to engage in political groupthink on domestic on and offshore resources, means we are playing catch up in the race to defend ourselves against the global energy crisis.
“Today’s announcement only scratches the surface of what we need for long-term energy security.
“GMB calls on Ministers to move at speed - because the brutal truth is the UK’s energy infrastructure will become even more vulnerable during the next decade, as existing nuclear plants are taken offline.
“Time is running out to fix the mess that has left our country so underprepared and exposed.”
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