LIZ Truss’ energy bill bailout WON’T see loans slapped on bills for years – but will be paid back in taxes instead.
The PM-to-be is to fix the unit price of gas and electricity for homes and businesses until at least next year – but won’t pass the buck to consumers to pick up the tab.
Read our new Prime Minister blog for the latest news & updates…
Liz Truss has dropped plans to force a levy on customers bills for years to come
Officials are rapidly drafting new laws to force firms to sell energy at a loss – with Government borrowing billions to plug the shortfall.
It means bills will effectively be frozen for millions of people and businesses.
But ministers have ditched plans for a 10 – 20 year levy to pay back the cash – over fears that a future PM could just scrap it.
Instead the billions of pounds of extra cash set to be splashed on the plan will wrap into general taxes.
Insiders hope it will avoid an almighty backlash of an ‘energy tax’ for years to come.
Ms Truss is gearing up to announce the move with a major speech on Thursday.
It will likely see household bills stay frozen at £1,971 to at least January for a typical use household — with firms’ soaring costs also helped.
Energy giants were last night locked in talks with the incoming administration about the details of the “bold plan”.
Insiders say it will freeze the wholesale cost of gas by law.
The price at which gas is sold by producers to energy providers will be capped — with legislation to make sure customers’ bills are then kept at a low price.
The Treasury and industry would meet the shortfall, with experts suggesting the taxpayer will be on the hook for at least £40billion. Supporters of the plan say that, by pegging bills, it would help reduce inflation.
Talks were being led yesterday by Jacob Rees-Mogg who is widely expected to be named as Business Secretary when Ms Truss unveils her new-look Cabinet tonight.
According to one source in the meetings, the cash will come partly from a fund provided by the banks — but backed by the Treasury.
A Whitehall source said: “We are moving quickly to support the public with the impact of high energy prices, caused by Putin’s weaponisation of energy.
“Energy company CEOs were clear that they understood the scale of the challenge and the need to play their part to ensure the success of the Government’s planned intervention.”
It is unclear at the moment whether energy firms will have to shoulder some of the extra costs too.
Ms Truss yesterday beat Rishi Sunak to lead the Tories and today will replace Boris Johnson in the top job.
After seeing off rival Mr Sunak by 81,326 votes to 60,399, she vowed to “deliver, deliver, deliver” for the British public.
Last night, Home Secretary Priti Patel quit as a sweeping reshuffle began.
Liz Truss beat Rishi Sunak yesterday to the Tory crown
