Annual energy bills to be capped at £2,500 for two years

The energy price cap will be fixed so households will pay no more than £2,500 a year on energy bills, the new Prime Minister Liz Truss has announced.

The first policy to address the mounting cost of living crisis, the government has said it will fix the wholesale price of energy and will take action to reduce the cost of energy over time.

This will be done by a new Energy Supply taskforce who will negotiate long-term contracts with suppliers to reduce costs.

Truss has said the plan will save households £1,000 a year and businesses will be offered support through a six-month scheme which will see their energy costs capped at the same price.

This is in addition to the £400 already promised off energy bills and a fund will also be set up to help households who aren’t covered by the energy price cap, such as those with communal heating systems.

Despite calls from Labour for a windfall tax to limit oil and gas companies profits and to fund an energy freeze, the government has confirmed it will not be imposing one.

Labour leader Kier Starmer said this means taxpayers will be left to pay for the energy crisis, allowing energy firms to make vast profits.

Instead, the Prime Minister said it would be launching a new oil and gas licensing round as soon as possible, will suspend green levies and will be lifting a ban on fracking.

She also said the government will be conducting a review into how the government will reach net zero ‘in a way that is pro-business and pro-growth.’

Photo by Nadine Marfurt