By Jason Groves Political Editor For The Daily Mail and Katie Feehan For Mailonline
Published: 17:31 EDT, 25 August 2022 | Updated: 03:46 EDT, 26 August 2022
Liz Truss today pledges 'immediate support' to help the hardest hit families with soaring power bills if she becomes prime minister and said she plans to hold an emergency budget within days of arriving at No 10.
The price cap is expected to be raised to more than £3,500 per household today – almost treble the figure a year ago.
Analysts say bills could rise by a further £1,000 in January, with more pain in April as Vladimir Putin 'weaponises' his gas resources.
But writing in the Daily Mail, Miss Truss says she would use an emergency budget next month to 'ensure support is on its way to get through these tough times'.
Energy firms warn that millions of families may be unable to pay their bills this winter without government help. And business leaders predict that many firms will go under unless action is taken to rein in their exorbitant power costs.
The Foreign Secretary argued it was not 'right' to announce the full plan before the contest is over or she has seen all the analysis being prepared in Whitehall.
She was looking at assistance 'across the board' despite in the past insisting she was focused on slashing taxes, rather than what she termed 'giving out handouts' but has now promised 'decisive action' to deliver 'immediate support'.
Writing in the Daily Mail, Liz Truss (pictured) says she would use an emergency budget next month to 'ensure support is on its way to get through these tough times'
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The energy price cap is expected to be raised to more than £3,500 per household today – almost treble the figure a year ago
The Telegraph reported that Chancellor Nadhim Zahawi is set to say measures to ease the burden will be announced as soon as possible after the winner of the Tory leadership contest is revealed in September.
The newspaper cited a Treasury source as saying Mr Zahawi has been 'working flat out to develop options for further support' so that Boris Johnson's successor 'can hit the ground running'.
Meanwhile, the Times reported that Truss held talks with Kwasi Kwarteng, the business secretary who is tipped to be her chancellor, and other senior members of her team about her plans.
Miss Truss's intervention comes as:
Miss Truss and her rival for No 10, Rishi Sunak, have both pledged to continue a £15billion support package unveiled in June.
But the Foreign Secretary today indicates she will go significantly further to ease the squeeze on cash-strapped homes.
She says Britain is facing 'extraordinarily difficult economic times', as a result of stagnant growth, high taxes and Russia 'using gas supply as a weapon'.
But she claims she can 'chart a confident course through this economic storm' and stave off a recession with her tax-cutting agenda.
Rishi Sunak (pictured) yesterday indicated he would offer further support to pensioners and low income households if he won, along with cutting VAT on energy bills
Business Secretary Kwasi Kwarteng (right), who is tipped to be her chancellor, has held talks with energy bosses about a £100billion plan to freeze bills for two years. But insiders played down the prospect of it being approved
'The impact on our cost of living is clear at the supermarket checkout, at the petrol pump and on our latest energy bills,' she writes.
'I know how hard it is for millions of Britons, and how grave concerns are about the consequences of today's decision by Ofgem on the next energy price cap. The rest of Europe is facing the same challenge, which will loom large as winter sets in.
What is the price cap?
The cap decides the maximum cost per unit that energy companies can charge for both gas and electricity. This is then used to calculate a typical annual bill.
Currently, the figure works out at £1,971 a year, based on typical use, but the actual bill varies according to use.
The cap, which was introduced by Theresa May's government in January 2019, is set by the industry regulator Ofgem.
Initially, it changed twice a year, however Ofgem recently changed the rules to allow four changes – January, April, July and October. This means millions of struggling households face two punishing increases this winter – in October and January.
What will it increase to?
Industry analysts predict the new tariffs will put the typical annual bill at £3,500-£3,700 from October 1. There are suggestions it could be £4,500 from January and over £5,500 from April. Obviously usage will affect what people pay.
What is the cap's purpose?
Theresa May envisaged it would protect households against profiteering energy giants. It would also, in theory, protect customers against sudden increases in bills.
More recently, Ofgem has allowed the cap to rise in a way that protects energy firms from going bust amid the soaring cost of wholesale gas and therefore electricity.
The effect is that bills are rising more sharply, and more often, to ensure suppliers can cover the spike in the wholesale prices of gas and electricity, which are around ten times higher than normal.
Will it affect my bills?
The cap applies to everyone on a standard variable tariff or pre-payment meter. This is virtually every household in the land – about 24 million. A few million are on long-term fixed rates but many of these are expiring in the next few months.
'If I am elected leader of the Conservative Party and prime minister, I will take decisive action on entering No 10 to provide immediate support, but will also tackle the root causes of these issues so we are never again in this difficult position. To those of you feeling the squeeze, my message is clear: I will ensure support is on its way and we get through these tough times.'
She has also pledged to 'fix the problems at the heart of this energy crunch at their source' by 'radically' boosting domestic supplies.
In today's article, Miss Truss says she will press ahead with her plan to slash taxes, with cuts expected to both national insurance and corporation tax in next month's 'fiscal event'.
And she stresses the need to push for growth and avoid a recession that would take a 'terrible toll'. Miss Truss has already pledged a suspension of green levies on energy, taking around £150 off bills.
She gives few details today of what additional help she is planning – or how much cash she is prepared to devote to the crisis – saying she has yet to see options being drawn up by the Treasury for the incoming prime minister.
Business Secretary Kwasi Kwarteng, who is tipped to be her chancellor, has held talks with energy bosses about a £100billion plan to freeze bills for two years. But insiders played down the prospect of it being approved.
Supply issues linked to Russia's invasion of Ukraine are one reason behind rapidly rising power bills - with recent warnings suggesting the average amount UK households pay for their gas and electricity could reach £6,000 next year.
Labour has called on both Tory leadership candidates to expand the windfall tax on oil and gas companies if they become prime minister.
But Ms Truss said in her piece for the Daily Mail that this approach risks 'deterring investors and slowing our pursuit of energy independence'
Government sources said the Treasury was working up options for providing short-term help, allowing the new PM to 'hit the ground running'.
These include increases in the winter fuel allowance for pensioners, targeted help to those on low incomes through the Warm Homes Discount Scheme or a general rebate on energy bills.
Mr Sunak yesterday indicated he would offer further support to pensioners and low income households if he won, along with cutting VAT on energy bills.
But he warned against Miss Truss's plans for 'unfunded' tax cuts, saying that tackling inflation had to be the priority.
When the Government announced its financial support package in May, Ofgem was expected to set October's price cap at around £2,800. Instead the regulator is tipped today to raise it to beyond £3,500.
Experts have warned that neither leadership candidate has produced plans that will deal with the magnitude of the crisis.
Torsten Bell, of the Resolution Foundation think-tank, predicted a catastrophe if bills continued to outstrip the ability of families and businesses to pay them.
He added: 'The world has changed on energy bills so policy will have to too.
'We can wake up to that reality now or later, but either way we'll be in a very different phase of this crisis policy-wise by Christmas.'
Caroline Flint, the Government's fuel poverty adviser, said: 'The fear is not so much that people will be disconnected by energy companies but that they will disconnect themselves.'
I know how hard it is for millions of you, but I will ensure support is on its way, writes Tory leadership hopeful LIZ TRUSS
We are facing extraordinarily difficult economic times. Growth is stagnant and taxes are at their highest in 70 years.
Prices are rising in the aftermath of Covid and the brutal war Russia continues to wage in Ukraine. Putin is using gas supply as a weapon against all those nations, including the United Kingdom, who have stood up to this appalling aggression.
The impact on our cost of living is clear at the supermarket checkout, at the petrol pump and on our latest energy bills.
My clear and consistently Conservative plan will deliver fundamental reforms to strengthen our energy security, get our economy onto a high-growth footing and stave off the threat of a recession
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Households could see their fuel bills cost more than their monthly mortgage payments next year as energy prices skyrocket, energy consultants have warned.
Energy prices could spike at as much as £6,823 per year for the average household from next April, according to the latest forecast by energy consultancy Auxilion, which amounts to about £569 a month.
In comparison, the average bill in October 2021 was £1,400 a year.
Homeowners with fixed-rate mortgages pay £741 a month on average, according to the latest data from trade body UK Finance, compiled in December.
That means homeowners could see just a £172 difference in the cost of paying their mortgage and heating their home.
For those with a standard variable rate (SVR) mortgage, the figures are even starker.
The average SVR mortgage monthly repayment, which borrowers can be transferred to once their fixed or tracker mortgage deal comes to an end, amounts to £516, UK Finance said.
That means that some households could end up paying £53 more on their utility bills than their mortgage as runaway energy prices overtake the cost of owning a home.
Meanwhile, people tied to a tracker mortgage, which directly track the Bank of England's base rate, will see around £50 added to their typical costs, according to calculations by the trade body.
The combined effect of higher mortgage repayments or monthly rent and surging bills could put some people under serious financial pressure in the months ahead.
Citizens Advice said that a quarter of people in the UK will not be able to afford to pay their energy bills in October based on current forecasts, jumping to a third of people in January when prices will soar higher.
It said its analysis took into account the energy rebate and cost-of-living payments offered by the Government, showing that the support on offer does not go far enough to protect households from spiralling costs.
Dame Clare Moriarty, chief executive of Citizens Advice, said: 'Every single day at Citizens Advice we're already helping people in the most heart-breaking circumstances, trying to scrape together enough to feed their kids and keep the lights on. This will get far, far worse unless the Government acts.
'It's becoming increasingly clear that skyrocketing prices will swallow up all of the help that has been announced so far.'
I know how hard it is for millions of Britons, and how grave concerns are about the consequences of today's decision by Ofgem on the next energy price cap. The rest of Europe is facing the same challenge, which will loom large as winter sets in.
If I am elected leader of the Conservative Party and prime minister, I will take decisive action on entering No 10 to provide immediate support, but will also tackle the root causes of these issues so we are never again in this difficult position.
To those of you feeling the squeeze, my message is clear: I will ensure support is on its way and we get through these tough times. My immediate priority will be to put more money back in people's pockets by cutting taxes, such as reversing the rise in national insurance.
I would also suspend the green levy on energy bills, bringing down average energy bills by £153. This will build on the work already underway, such as the Energy Bills Support Scheme, which will see a £400 discount paid to consumers from October, and the £1,200 package of support for the most vulnerable.
But that is just the start. I have a bold plan to grow the economy, which is the best tonic to deal with the cost of living and make sure we are solving these issues at source, not just throwing taxpayers' hard-earned money at problems as a quick fix rather than an enduring solution.
My clear and consistently Conservative plan will deliver fundamental reforms to strengthen our energy security, get our economy onto a high-growth footing and stave off the threat of a recession.
We know a recession would take a terrible toll on our country, and some say it is inevitable. But indulging the voices of decline will benefit no one.
Instead, I am determined to chart a confident course through this economic storm. I am ready to take the necessary decisions when in office in light of all the facts.
It isn't right to announce my chancellor's plan in August, before I have even won the leadership contest or seen all the analysis being prepared in Whitehall. Under my leadership, we will work flat out to deliver energy affordability and security.
I will always be honest with the public about the time it will take to put things right. But my administration will, from day one, focus relentlessly on people's priorities – the things they need and care about and which make a real difference to their lives.
In a world where authoritarian regimes are willing to weaponise energy, we cannot afford to be held hostage. We do not rely on Russian gas, unlike our European allies, but no country is safe from malign efforts to push up energy prices.
Energy security starts at home, which is why we must radically boost domestic supplies. The government I lead will seek to unleash more energy by maximising our North Sea oil and gas production.
We will not be swayed by short-sighted calls to hit these firms with a windfall tax, as that risks deterring investors and slowing our pursuit of energy independence.
We will end the effective ban on extracting our huge reserves of shale gas by fracking but be led by science, setting out a plan to ensure communities benefit. Fracking will take place only in areas with a clear public consensus behind it.
When autocrats like Putin are ready to exploit the world's reliance on fossil fuels, we need to embrace diverse energy sources
When autocrats like Putin are ready to exploit the free world's reliance on fossil fuels, we need to embrace diverse sources of energy. I will champion the UK's world-leading technologies like nuclear alongside renewables such as wind and tidal.
We have huge potential to harness, whether it is through the small modular reactors made by Rolls-Royce in Derby or our nation having the largest offshore wind capacity in Europe – thanks to firms like Scottish Power.
This is why I believe our great country can become over the next decade an energysecure dynamo, which could be powering Europe as a net energy secure exporter.
I know the coming months will be hard, which is why we will take decisive action to grow our economy, cut taxes and fix the problems at the heart of this energy crunch at their source. By holding our nerve, we will deliver for the British people and come through the economic storm together.
Families could save hundreds of pounds on their energy bills this winter by taking a few simple steps.
Soaring costs are set to impact British households as the energy price cap rises on Friday, and is expected to increase yet again in January.
As the country faces energy bill hell in a growing cost-of-living crisis, MailOnline reveals the expert tips that could help households save money, and improve energy efficiency...
The process is different for every boiler, but it is always fairly simple.
There are specific instructions how to turn down the flow in each boiler manual.
The Heating Hub also has a guide on their website.
It is important to only do this if you have a condensing combi boiler that is connected to a hot water cyclinder.
The flow temperature on a boiler regulates how hot the water is when it leaves the boiler to go to your radiators.
Most condensing combi boilers in the UK are still set to their factory setting, which tends to be around 80C, but this setting can let heat escape out of the flue and into the street.
However turning down the flow temperature to 60C means the boiler works to recycle a lot of this heat back into the water it is trying to warm up.
Jo Aslop of the Heating Hub said that by doing this, households could save around 6% to 8% of their annual gas usage.
Ms Aslop said: 'It's worth making the point that condensing boilers, even though they're A-rated on the box (for efficiency), they don't necessarily achieve A-rating in the home.
'We would advise to lower the flow temperature to 60C and if they find that's a bit too cool on a very cold day, they can always notch it back up, but importantly reduce it down again when the weather gets a bit warmer, and keep reducing it down.'
Several energy suppliers are also urging customers to turn down their boiler flow temperature.
Rebecca Dibb-Simkin, chief product officer at Octopus Energy, said: 'Safely turning down the water flow temperature of your gas boiler is a little-known but very effective tip for saving gas whilst staying warm, and could save people up to 8% off their gas bills.
'Over 100,000 of our customers who took part in our energy efficiency scheme last winter told us they tried it, with some of them knocking nearly £100 off their bills.
Most condensing combi boilers in the UK are still set to their factory setting, which tends to be around 80C, but this setting can let heat escape out of the flue and into the street
Turning boilers off is not advisable or an effective way to save energy.
Instead, thermostats and timers should be used effectively to regulate their operation.
Fridges and freezers are designed to be kept on all the time and energy will not be saved by turning them off for short periods because more energy will be used to cool them down again when turned back on.
There are also important safety issues that can arise if food partially defrosts before it is prepared for eating.
The pre-heat function makes sure that the boiler always keeps a small hot water ready to flow to the taps at a moment's notice.
It is a useful function when you need hot water quickly and do not want to wait, such as washing your hands, but the boiler is using energy to heat up water when you do not need it.
Ms Alsop said: 'If the boiler is not on and heating the home, it will fire anyway, just to keep that water at temperature, even if someone is not home during the day, and certainly it will fire all through the night, even when hot water is not in demand.
She estimates that households could save between 5% to 10% of their gas use.
Households should do a complete check of every power outlet, unplugging anything that is not necessary and turning devices off standby mode.
Energy Saving Trust calculates that you can save around £55 a year just by remembering to turn your appliances off standby mode.
Almost all electrical appliances can be turned off at the plug without upsetting their programming.
Households can get a standby saver or smart plug which allows you to turn all your appliances off standby in one go.
Tumble dryers are massive energy drains, so on warm days hang clothes outside to dry instead and invest in a drying rack for cooler months.
Use washing machines on a 30C cycle and reduce use by one run a week.
Only run your dishwasher when it is full and use eco settings if possible.
Avoid overfilling the kettle and only boil the amount you need.
Tumble dryers are massive energy drains, so on warm days hang clothes outside to dry instead and invest in a drying rack for cooler months
The more fridges and freezers ice up, the more energy they will use, so defrosting them regularly can help improve efficiency.
A full freezer is more economical to run, as the cold air does not need to circulate as much, so less power is needed.
If you have lots of free space, half-fill plastic bottles with water and use these to fill the gaps.
BBC Good Food suggests you fill the freezer with everyday items you are bound to use, such as sliced bread, milk or frozen peas.
The more fridges and freezers ice up, the more energy they will use so defrosting them regularly can help improve efficiency
Replacing all the lights in your home with LED bulbs can help save even more money
Turn lights off when you are not using them or when you leave a room.
Replacing all the lights in your home with LED bulbs can help save even more money.
When opening the windows of your house on a warm day, all it does is fill the room with hot air.
It is best to use blinds and curtains to block direct sunlight during the day and then open the windows at night when temperatures drop.
This helps to save energy and reduce the need for power-hungry fans.
It is best to use blinds and curtains to block direct sunlight during the day and then open the windows at night when temperatures drop
Fans can send bills soaring, and there are ways of maximising their effect but cutting the amount of time when they are on.
Putting fans at floor level helps to circulate the lower cold air rather than the warmer air that naturally rises in a room.
You can also create the ideal combination for energy saving by pairing smart fan usage with closed windows, keeping the fans working during the day and the windows open at night.
A quarter of heat in an uninsulated home is lost through the roof. Most homes have at least some loft insulation but often not enough
New analysis by the Energy and Climate Intelligence Unit has found homes rated band F on the Energy Performance Certificate (EPC) system, a measure of the home's efficiency, are set to have a gas bill £968 higher than a home rated EPC band C, the Government's target for 2035.
The average home in the UK is rated band D and these homes will pay £420 more for their gas this winter, compared with band C.
Energy Saving Trust also says that for those wishing to future-proof their homes, investing in professional draught-proofing and insulation in preparation for the winter months could lead to a reduction in bills by £405 for a semi-detached home.
DIY draught-proofing is much cheaper and anything is better than nothing.
Installing solar panels for a similar property could lead to additional annual savings of around £450.
A quarter of heat in an uninsulated home is lost through the roof. Most homes have at least some loft insulation but often not enough. Topping up from 120mm to at least 270mm of insulation will help.
We don't want to pay taxes to enable government ha...
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