Liz Truss caps typical bill at £2,500 a year for two years as Starmer condemns refusal of windfall tax – UK politics live | Politics

The government has now sent out a press release about the “energy price guarantee” announced by Liz Truss earlier. It does not seem to be available online yet, and so here are some excerpts.

Help for households

Under new plans, a typical UK household will pay no more than £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 £150, from household bills. The guarantee will supersede the existing energy price cap.

This will save the average household £1,000 a year based on current energy prices from October. It comes in addition to the announced £400 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 direct 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.

Today’s action will deliver substantial benefits to the economy – boosting growth and curbing inflation by 4-5 points, reducing the cost of servicing the national debt.

Help for business

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%.

A new six-month scheme for businesses and other non-domestic energy users (including charities and public sector organisations 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’ time to consider where this should be targeted to make sure those most in need get support.

Reforms to energy market

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 this two year period to ensure the UK’s investment in home-grown, secure renewable technologies continues.

Whilst the intervention will be funded by the government, action is being taken to significantly reduce the cost over time, including:

A new energy supply taskforce – led by Madelaine McTernan who headed up the UK’s successful vaccine taskforce – has begun negotiations with domestic and international suppliers to agree 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.

HM Treasury are 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 Treasury has published details of that here.]

Measures to increase energy supply

Learning from the mistakes of the past, the government is taking action to accelerate domestic energy supply, increase our energy resilience and achieve our ambition to make the UK an energy exporter by 2040:

Launch a new oil and gas licensing round as early as next week, expected to lead to over 100 new licences.

Lift the moratorium on UK shale gas production. This will enable developers to seek planning permission where there is local support, which could get gas flowing in as soon as six months.

Drive forward the acceleration of new sources of energy supply from North Sea oil and gas to clean energy like nuclear, wind and solar.

Continue progressing up to 24GW of nuclear by 2050, with Great British Nuclear helping to set direction of getting new nuclear projects online in the UK.

In the Commons Sir Lindsay Hoyle, the Speaker, has just interrupted Ian Blackford, the SNP leader at Westminster, who is delivering a speech in the debate, to comment on an announcement from Buckingham Palace.

Hoyle is referring to this.

Hoyle says:

I know I speak on behalf of the entire house when I say that we send our best wishes to Her Majesty the Queen, and that she and her family are in our thoughts and prayers at this moment.

He says he is not going to say any more at this point.

My colleague Caroline Davies’s story about the Queen is here.

Starmer says the government banned onshore wind in 2015. That cost the UK the equivalent of the energy it imported from Russia. That was a “policy disaster”, he says.

And he says Truss has consistently opposed solar energy. When she was environment secretary she cut subsidies for solar, and the market crashed, he says.

Keir Starmer is speaking now.

He says Labour called for a price freeze earlier in the summer, and was criticised for doing so. He says he is pleased there is action being taken today.

But the key question is will pay for this. The energy companies are making £170bn in windfall profits over the next two years, he says. He says Labour wants to tax this, but Li Truss is opposed. He goes on:

Every pound the government refuses to raise in windfall taxes … is a pound of extra borrowing. It’s that simple.

This is what Liz Truss has announced.

• A typical household will save on average £1,000 a year from her two-year energy price guarantee, she claims.

• An average energy bill for a typical household will be no more than £2,500 a year for the next two years from 1 October under the plan. This figure takes account of the removal of green levies (worth around £150 per household) and it will supersed the existing energy price cap.

• Households who do not pay direct for gas or electricity from the mains will receive support from a fund, and will be no worse off, Truss says.

• Businesses will get equivalent support, under a scheme lasting six months. After this there will be ongoing support, particularly for vulnerable industries.

Truss says that for too long the government has ignored the need for energy security.

She says she will address this. She wants to make the UK a net energy exporter by 2040, she says.

That’s it. She has finished.

Truss says that, to improve long-term energy security, she is announcing two reviews.

First, there will be a review of energy regulation.

And, second, there will be a review of how the government can reach net zero “in a way that is pro-business and pro-growth”.

She says this will be led by Chris Skidmore.

Skidmore, a former energy minister, is one of the Tory MPs most committed to net zero.

Truss announces another plan that she says will curb prices.

I’m announcing today that, with the Bank of England, we will set up a new scheme worth up to £40bn to ensure that firms operating in the wholesale energy market have the liquidity they need to manage price volatility.

This will stabilise the market and decrease the likelihood that energy retailers need our support like they did last winter.

By increasing supply, boosting the economy and increasing liquidity in the market, we will significantly reduce the cost to government of this intervention.

In the Commons Truss says today’s intervention will curb inflation by up to five percentage points. This will cut the cost of servicing government debt, she says.