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New UK Prime Minister To Freeze Energy Bill Prices For Two Years

New UK Prime Minister To Freeze Energy Bill Prices For Two Years thumbnail

Prime Minister Liz Truss has set out decisive action to support people and businesses with their energy bills and tackle the root causes of the issues in the UK energy market through increased supply – ensuring the country is not left in the same position again.

Under new plans, a typical UK household will pay no more than $2,900 (£2,500) a year on their energy bill for the next two years from 1st October, through a new Energy Price Guarantee which limits the price suppliers can charge customers for units of gas. This takes account of temporarily removing green levies, worth around $175, from household bills. The guarantee will supersede the existing energy price cap.

This will save the average household $1,160 a year based on current energy prices from October. It comes in addition to the announced $460 energy bills discount for all households and together they will bring costs close to where the energy price cap stands today.

The new guarantee will apply to households in Great Britain, with the same level of support made available to households in Northern Ireland.

Those households who do not pay directly for mains gas and electricity – such as those living in park homes or on heat networks – will be no worse off and receive support through a new fund.

The new measures will deliver substantial benefits to the economy by boosting growth and curbing inflation by 4-5 points, reducing the cost of servicing the national debt.

The historic intervention comes after a failure to invest in home-grown energy and drive reform in the energy market. Putin’s weaponization of energy supply has exposed the UK’s vulnerability to the volatility of global markets, coupled with a regulatory framework that is no longer fit for purpose, which is driving up bills and holding back economic growth.

“Decades of short-term thinking on energy has failed to focus enough on securing supply – with Russia’s war in Ukraine exposing the flaws in our energy security and driving bills higher. I’m ending this once and for all. I’m acting immediately so people and businesses are supported over the next two years, with a new Energy Price Guarantee, and tackling the root cause of the issues by boosting domestic energy supply.”

“Extraordinary challenges call for extraordinary measures, ensuring that the United Kingdom is never in this situation again,” Prime Minister Liz Truss said.

As businesses have not benefited from an energy price cap and are not always able to fix their energy price through fixed deals, many are reporting projected increases in energy costs of more than 500 percent.”

A new six-month scheme for businesses and other non-domestic energy users (including charities and public sector organizations like schools) will offer equivalent support as is being provided for consumers. This will protect them from soaring energy costs and provide them with the certainty they need to plan their business.

After this initial six-month scheme, the Government will provide ongoing, focused support for vulnerable industries. There will be a review in 3 months to consider where this should be targeted to make sure those most in need get support.

The Government will provide energy suppliers with the difference between this new lower price, and what energy retailers would charge their customers were this not in place. Schemes previously funded by green levies will also continue to be funded by the Government during these two years to ensure the UK’s investment in home-grown, secure renewable technologies continues.

The UK will also be acting to significantly reduce the cost over time. This includes a new Energy Supply Taskforce led by Madelaine McTernan has begun negotiations with domestic and international suppliers to agree on long-term contracts that reduce the price they charge for energy and increase the security of its supply. The Taskforce and Department for Business, Energy, and Industrial Strategy will negotiate with renewable producers to reduce the prices they charge as well.

Also, the Treasury is announcing a joint scheme working with the Bank of England to address the extraordinary liquidity requirements faced by energy firms operating in UK wholesale gas and electricity markets. The Energy Markets Financing Scheme will enable stability to both energy and financial markets, and the economy, and reduce the eventual cost for businesses and consumers. The scheme will provide short-term financial support and will be designed to be used as a last resort.

UK To Increase Country’s Energy Supply

The UK government is taking action to accelerate the domestic energy supply, increase the country’s energy resilience, and achieve the ambition to make the UK an energy exporter by 2040. Namely, the UK is launching a new oil and gas licensing round as early as next week, expected to lead to over 100 new licenses. It will be lifting the moratorium on UK shale gas production as well as enabling developers to seek planning permission where there is local support, which could get gas flowing in as soon as six months.

The UK will also be driving forward the acceleration of new sources of energy supply from the North Sea oil and gas to clean energy like nuclear, wind, and solar as well as continue progressing up to 24GW of nuclear by 2050, with Great British Nuclear helping to set the direction of getting new nuclear projects online in the UK.

Furthermore, the Government will undertake fundamental reforms to the structure and regulation of the energy market through recommendations from a new review of the UK Energy Regulation and launch a review to ensure meeting the previously set Net-Zero 2050 target.

“Millions of families and businesses across the country can now breathe a massive sigh of relief, safe in the knowledge that the government is standing behind them this winter and the next. The price of inaction would have been far greater than the cost of this intervention. Not only can we provide urgent support now, but the beauty of our scheme is that it will also bring down inflation, helping tackle wider cost of living pressures,” Chancellor Kwasi Kwarteng said.

“The global headwinds caused by Russia’s war in Ukraine, Putin’s weaponization of energy, and the aftermath of Covid, have exposed the need to strengthen Britain’s energy security for the good of the nation and the millions of households and businesses who will struggle to meet the cost of bills this winter. The action we are taking today will reduce that worrying burden in the short term and will invigorate the long-term reforms we need to complete, to resolve the underlying problems in the energy market and ensure the British people enjoy affordable and plentiful energy in the future,” Business and Energy Secretary Jacob Rees-Mogg added.


3 Comments on "New UK Prime Minister To Freeze Energy Bill Prices For Two Years"

  1. makati1 on Sat, 10th Sep 2022 4:54 pm 

    Fun to watch the West go down like the sun, but never to rise again. The new bitch, running the UK into the ground, like her predecessor, is more proof that something is rotten in not only Denmark, but the entire West. So be it

    BTW: Olive Garden Restaurant just opened a branch in Manila. I would guess they will be closing more restaurants in the US as the power and money moves East. ^_^

  2. Theedrich on Sun, 11th Sep 2022 1:45 am 

    Yep, blame Russia and go insane. Nice to watch Merry Olde England return to its medieval dimensions and lifestyle.

  3. Theedrich on Sun, 18th Sep 2022 12:17 am 

    British Prime Minister Liz Truss is a dolt. On February 11, 2022, she asserted that Britain would never recognise Russian oblasts  Rostov (Ростов) and Voronezh (Воронеж) as Russian.  These provinces just happen to be Russian provinces, but Truss is so ignorant that she had no idea about what she was discussing.  Never mind the mentally failing Biden throne-sitter.  This kind of stupidity, of course, is typical for American and British politicians.

    It is this kind of Anglo-American ignorance and dementia that will eventually flush the West down the cosmic commode.

    It will be good riddance for an electorate that has chosen its own demise.

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