Truss set to freeze energy bills for millions of homes to combat cost of living crisis this winter

4 September 2022, 23:57 | Updated: 5 September 2022, 15:38

Incoming prime minister Liz Truss is understood to be "in talks about an energy bills freeze".
Incoming prime minister Liz Truss is understood to be "in talks about an energy bills freeze". Picture: Alamy

By Sophie Barnett

Liz Truss is reportedly considering freezing energy bills for millions of hard-pressed households this winter, in a bid to combat the cost of living squeeze.

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The Foreign Secretary, who will formally become Britain's prime minister on Tuesday after beating rival Rishi Sunak to lead the Conservative party, has vowed to tackle the cost of living crisis within her first week in office, with plans still to be announced.

Ms Truss is expected to give help to the poorest households, with energy company insiders revealing a freeze of some form is expected, as reported by both The Telegraph and The Times.

“The plan is to introduce some kind of artificial price cap for consumers combined with a mechanism for reimbursing suppliers,” one source told The Times.

“Plans are reasonably well advanced and involve not just civil servants but also ministers lined up for jobs by Truss.”

Kwasi Kwarteng, the Business Secretary tipped to become chancellor if Ms Truss wins, reportedly appeared “very open” to options for a freeze.

Read more: Truss pledges 'immediate action' on spiralling energy bills as fears grow over cost of living

Read more: Queen will stay at Balmoral and not return to London to appoint new Prime Minister amid mobility issues

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Follow events live on Global Player. Picture: LBC

There have been ever-louder calls in recent weeks for the Government to intervene to support the most vulnerable, with energy bills set to rise to around £3,500 this winter for the average household.

Small businesses have also shared their concerns on social media, with the steep rise in bills forcing many to close their doors for good.

On Sunday, Ms Truss, who is widely tipped to defeat rival Rishi Sunak, said the rise in energy bills did not have to mean “Armageddon” this winter.

She refused to detail her plans but carefully declined to rule out freezing bills - a policy proposed by the Labour Party and energy companies - in an interview with the BBC.

Ms Truss said: “I will act if I’m elected as prime minister. I will act immediately on bills and on energy supply because I think those two things go hand in hand.”

Read more: Energy crisis is a small price to pay to avert a 'fully-fledged world war', says Zelenskyy

Liz Truss is expected to become the next prime minister.
Liz Truss is expected to become the next prime minister. Picture: Alamy

Cold homes this winter will cause 'permanent damage to kids' lungs

She said she would "not go into details" of any future announcement, but said: "I think we are in a good position to deal with what are very tough challenges.”

Throughout the campaign, Ms Truss has pledged to "start cutting taxes from day one" with a new Budget and Spending Review that would reverse April's rise in national insurance and next year's corporation tax increase from 19% to 25%.

On Sunday, she was criticised over her plans to "give the wealthiest people more money back".

Truss was asked by the BBC: “Is it it fair to give the wealthiest people more money back?”

She said: “It is fair. We promised in our manifesto we would not raise national insurance.

“I oppose the decision to raise it in cabinet because it was the wrong decision.”

Ms Truss added: “The people at the top of the income distribution pay more tax so inevitably when you cut taxes you tend to benefit people who are more likely to pay tax.

“What I am about is about growing the economy and growing the economy benefits everybody.”

Writing in the Sunday Telegraph, Ms Truss said she would appoint a council of economic advisers to help guide her and her Chancellor.

She said: "I understand how challenging the cost of living crisis is for everyone. These are tough times and the months ahead will be hard."

She said that she will take "immediate action" to tackle the crisis for families and businesses, while also delivering a "broader plan to get our economy growing, make it more resilient and make it more competitive".

Read more: Bus journeys in England to be capped at £2 amid fears of soaring costs this winter

"We need to take the difficult decisions to ensure we are not in this position every autumn and winter," she said.

"Sticking plasters and kicking the can down the road will not do. I am ready to take the tough decisions to rebuild our economy."

Shortly after midday on Monday, the contest to succeed Boris Johnson will formally end, with either Ms Truss or Mr Sunak, the former chancellor, announced as the next Tory leader.

Ms Truss has been the favourite throughout and is expected to be crowned the next prime minister by the Queen at Balmoral on Tuesday.

The monarch, who is 96, would normally hold an audience with the departing Prime Minister at Buckingham Palace.

However, Boris Johnson will hand in his resignation after travelling up to Scotland on September 6.

Over the weekend, Mr Johnson urged his party to unite behind the contest's winner.

"This is the moment for every Conservative to come together - and back that new leader wholeheartedly," he wrote in the Sunday Express.