Liz Truss will on Thursday set out a plan to save households and businesses from financial ruin with an intervention to try and save thousands of households from soaring energy bills.
Ms Truss told the Commons on Wednesday: “I will make sure that in our energy plan we will help to support businesses and people with the immediate price crisis, as well as making sure there are long-term supplies available.
“I understand that people across our country are struggling with the cost of living and they are struggling with their energy bills.
What is Liz Truss expected to announce on energy bills?
Ms Truss confirmed her plan, expected to freeze household bills at around £2,500, will be set out in Parliament.
The Prime Minister is expected to announce a plan to freeze domestic bills in England, Scotland and Wales at around £2,500 – some £500 higher than the current cap but £1,000 below the level they are expected to hit in October and many thousands below rises predicted over the next six months.
The policy, which could cost as much as £150 billion according to The Times, will be funded through borrowing and general taxation and is still being finalised by Ms Truss.
Chancellor Kwasi Kwarteng cautioned the leaders that the Government will have to borrow more money in the short-term to help households and businesses through the energy and cost-of-living crisis.
Liz Truss to announce energy bill freeze amid warnings tens of thousands of businesses are facing insolvency
What time is Liz Truss energy announcement and how to watch?
It is not yet known when Liz Truss will give an update on her plan to tackle soaring energy costs.
The energy announcement is expected by around 11:30am – but could vary based on other events in the House of Commons.
A general debate on the UK energy cost is scheduled in the parliamentary schedule after business questions to the leader of the House.
It is believed the announcement will come as part of this general debate, and not as a ministerial statement.
The announcement will be available to watch on major news channels and Parliament TV.
Will energy bills be frozen?
While energy bills are set to be frozen, they are still set to rise from current levels.
According to reports, energy bills are set to rise by some £500 higher than the current cap, but £1,000 below the level they are expected to hit in October.
The new Chancellor of the Exchequer has said that the Government will take “decisive action” to help British people through the energy crisis, in his first meeting with the country’s top banks and insurers.
Chancellor Kwasi Kwarteng delivered the message after an hour-long meeting with City leaders at the Treasury on Wednesday morning.
Will the energy bills plan be paid for by a windfall tax?
While energy firms have announced record profits, Liz Truss has ruled out the idea of windfall taxes on the big oil and gas producers, saying this would reduce tax revenues and discourage vital investment.
She has continually rejected the idea of using a windfall tax on the bumper profits made by oil and gas giants to fund the package, reported to cost up to £150 billion.
The Prime Minister’s official spokesman said the existing windfall tax imposed under Boris Johnson still stands, despite Ms Truss’s opposition to such levies.
And Downing Street indicated that the moratorium on fracking in England could be lifted in Ms Truss’s energy package despite the 2019 Conservative manifesto opposing an end to the ban without science showing it can be done safely.
The matter was raised in the Commons during Prime Minister’s Questions.
In response to Labour leader Sir Keir Starmer, who has pushed for a levy on the £170 billion of “excess profits” that oil and gas producers are expected to enjoy over the coming years, Ms Truss rejected a windfall tax.
“I am against a windfall tax, I believe it is the wrong thing to be putting companies off investing in the United Kingdom just when we need to be growing the economy,” she said.
Liz Truss replied that she understood people were “struggling with the cost of living” and energy bills, but that the UK will not be able to “tax its way to growth” and that she will “make sure that in our energy plan we will help to support businesses and people with the immediate price crisis, as well as making sure there are long-term supplies available.
She said that if taxes are put up and raised to the same level as France, it will put off investors.
Corporation tax had been due to increase from 19% to 25% in 2023, but Ms Truss said that would deter investors and the UK cannot “tax its way to growth”.
The Prime Minister added she would reform the UK’s overall energy mix by building more nuclear power stations and exploring more fossil fuel supplies in the North Sea.