New PM Liz Truss announces plans to tackle soaring energy bills

The new Conservative Prime Minister Liz Truss has announced her plans to support households and businesses who are being hit with soaring gas and electricity bills.

The “Energy Price Guarantee” caps energy bills at £2,500 per year for typical households, for the next two years.

This is in addition to the £400 (£66 a month) payment that kicks off in October, to help keep outgoings down. Businesses will also receive a package offering “equivalent support”.

The announcement can be seen as positive as the current price cap is £1,971 per year, due to rise to £3,549 and forecast to hit £5,400 in January.

However, many are still pointing to the UK energy companies that posted large profits in 2022. The Treasury estimated that UK gas and electricity generators could stand to make excess profits up to £170 billion over the next two years.

There is interest over how this affects the UK’s Net Zero strategy, as the government today announced plans to lift the ban on fracking, and Martin Lewis from Money Saving Expert highlighted that the reduction in the cap includes getting rid of green levies.

In this Twitter thread, Richard Lowes suggest that the strategy could reduce the cost of electricity compared to gas, and drive markets towards electrification:

Speaking about the announcement, sustainability expert and regular Installer columnist Tim Pollard said:

“Of course, the government intervention on capping energy bills at £2,500 p.a. is welcome, especially for those most in need, but have no doubt that the rampant energy price inflation is affecting a huge number of households and businesses.

“I also understand that governments almost always prefer short-term strategies which will be remembered when the ballot boxes are next rolled out. The cost of the strategy is almost unimaginable but the prospect of a lack of action is simply impossible.

“However, I would stress the key issues which will come back to haunt us unless bold and far-reaching actions are taken now. Firstly energy self-sufficiency. We really need to get ourselves into a position where we are not reliant on others for the sources of our energy, and that means a massive increase in investment in renewables and nuclear generation. This must happen now and be unrelenting.

“Secondly, the ever-quickening pace and effects of climate change MUST mean a resolve to stop burning fossil fuels. A step up in prospecting for oil and gas and the move to return to fracking is so short-sighted and indicative of a real lack of understanding.

“Lastly, we must address the difficult issue of our energy inefficient housing stock. This is long overdue and has sat on the top of the ‘too difficult’ tray for every government for the last 20 years. Fabric first, followed by heat generation must be the approach and all work must be professionally designed as appropriate for each property and expertly fitted by trained tradespeople.”

Heating Engineer Andy Gibbs added: 

“Now while the cap is great news, it will come at a price. The government must borrow the money to enable this to happen, and one day that money must be repaid, and it’s you and I who will pay. However, the government simply had to act on this issue and act they certainly have.

“Moving on to fracking. This can’t be allowed. It’s banned in loads of countries, and rightly so, over the potential health implications surrounding it, not to mention the environmental impact. We do need energy, but fracking isn’t the answer”.
In response to the announcement by Prime Minister Liz Truss, ECA Director of Workforce and Public Affairs Andrew Eldred said:
“While we welcome the PM’s six-month plan to support businesses, we are concerned by the lack of transparency with regard to how they will be supported in the longer term. We hope the electrotechnical and engineering services sector will be granted subsequent additional support.

“Our Members, and the wider industry, will remain worried about the future until we obtain some clarity from the Chancellor’s fiscal plan later this month.

“The Government’s renewed commitment to net zero carbon by 2050 is encouraging. However, ECA maintains that the only viable path to net zero is urgent investment in energy efficiency measures and renewables, and not the development of fracking and gas extraction in the North Sea.”