£130bn plan to keep energy bills below £2,000

Incoming UK Prime Minister Liz Truss has agreed to plans to fix annual electricity and gas bills for a typical UK household at or below the current level of £1,971, according to a Bloomberg report.

The report said Truss has settled on a mechanism that will avert the massive increase in energy bills that is due to kick in next month under the existing pricing system.

The policy could cost as much as £130 billion over the next 18 months, according to policy documents seen by Bloomberg.

Energy bills in the UK were due to jump 80% from October to £3,548 a year on average.

Under the plans drawn up by Truss’s team, that pricing regime will effectively be abolished and the energy regulator Ofgem will be sidelined.

Ministers will now set a new unit price that households will pay for electricity and gas, the report said.

The report said energy companies have been receptive to the idea, which means they will avoid a windfall tax and see the shortfall in their revenue covered by the taxpayer.

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.