New Prime Minister Liz Truss, new Boris Johnson successor yesterday, 6order September 2022, is understood to be all the gunfire when it comes to rising energy bills. Ms. Truss is expected to borrow billions of dong to limit energy costs for individual households and businesses across the country.
So far it is understood that the Prime Minister could cap the energy bill at £2,500. Full details are expected to come out tomorrow, 8order September. Latest price cap, effective October 1st, which would bring the average household bill up from £1,971 annually to a staggering £3,549. With the cost of living rapidly rising, help is urgently needed. Will Liz Truss be the one to help us?
There is currently a £400 energy subsidy being given to each UK household from October. This will be split over a six-month period. Households will not have to pay this amount back.
The funding package from new prime minister Truss is expected to be worth £100 billion. However, it remains unclear how long the government will reduce the energy limit and how taxpayers will have to pay the money back. Ms. Truss has vowed to “solve the energy crisis”, with millions hoping for real and effective support.
There has been news of energy companies producing plans to help customers with their energy costs through a government-backed fund. Energy companies will participate in this fund to subsidize energy bills, with the additional cost being added to the consumer’s bill over a longer period to spread the cost. However, it is said the government does not want to see the money added to consumers’ bills for up to 20 years in the future.
The move to borrow £100 billion as well as cut personal taxes and increase public spending could pose challenges. Additionally, UK government borrowing hit an eight-year high this week. This puts even more pressure on the new Prime Minister when she takes office.
However, the total amount needed to lower the energy price cap will fluctuate. This depends on the wholesale price of gas and electricity.
As always, at MoneyMagpie here we will try to keep you updated as much as possible as news becomes available.