A new Energy Price Guarantee will take effect from October that will give people certainty on energy bills. The Guarantee takes account of temporarily removing green levies, worth around £150, from household bills and will supersede the existing energy price cap.
From 1st October, a typical household will pay no more than £2,500 per year for each of the next two years, while the government gets the energy market back on track. This will save a typical household £1,000 a year and comes in addition to the £400 energy bills discount for all households, which together will bring costs close to where the energy price cap stood before October. This is on top of the £650 payment to those on means-tested benefits (plus £150 for those on disability benefits) and the £300 payment to pensioners who receive the winter fuel payment announced for the most vulnerable households earlier this year.
Those households who do not pay direct for mains gas and electricity – such as those living in park homes or those who use heating oil – will receive support through a new fund.
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.
The Government is also taking action to accelerate domestic energy supply, increase our energy resilience and achieve our ambition to make the UK an energy exporter by 2040. Actions being taken include:
- lifting the moratorium on UK shale gas production
- undertaking fundamental reforms to the structure and regulation of energy market through recommendations from a new review of the UK Energy Regulation
- launching a new oil and gas licensing round as early as next week, expected to lead to over 100 new licences.
- launching a review to ensure we are meeting our Net Zero 2050 target in an economically-efficient way, given the altered economic landscape. Chaired by Chris Skidmore MP and reporting by the end of this year, it will ensure delivering the target is not placing undue burdens on businesses or consumers.
Commenting on the announcement, Richard Fuller MP said:
The recent surge in energy prices, driven in large part by Putin’s invasion of Ukraine, has been a source of enormous concern for household and businesses across the country and these steps will provide reassurance to all those who were fearing the bleakest of winters.
By taking these strong and decisive measures in her first days as Prime Minister, this clearly demonstrates that Liz Truss has the courage and vision to successfully address the most-pressing issues facing us all. By laying out plans to address the country’s long term energy security, the Prime Minister is setting us on a path for steadier and more sustainable energy prices for the years ahead.
