Government announces energy price guarantees for homes and businesses, taking urgent action to reform broken energy markets

• A typical household can save an average of £1,000 a year on energy bills under the new two-year Energy Price Guarantee.
• Businesses and public sector organizations will receive comparable support over the winter
• New plan tackles root causes of energy market problems by boosting domestic energy supply
• The package will boost growth and curb rising inflation

Prime Minister Liz Truss launches decisive action to help people and businesses with energy bill and tackle root causes of UK energy market problems through increased supply, ensuring country is not put in the same position again will do so.

Under the new plan, a typical UK household will pay less than £2,500 a year in energy bills for the next two years from 1st October. This is done through a new Energy Price Guarantee that limits the price suppliers can charge their customers on a per-gas basis. This allows for the temporary removal of about £150 worth of environmental taxes from household expenses. This guarantee replaces the existing energy price cap.

This will save the average household £1,000 a year based on current energy prices from October onwards. This, on top of the announced £400 energy bill discount for all households, brings the cost closer to the ceiling of today’s energy prices.

The new guarantee applies to UK households and provides the same level of support for Northern Ireland households.

Households that do not directly pay for mains gas or electricity, such as those living in park houses or heating networks, will be able to receive assistance through the new fund.

Today’s actions will bring huge benefits to the economy, including boosting growth, keeping inflation in check by 4-5 percentage points, and reducing the cost of repaying government bonds.

The historic intervention comes after a failure to invest in domestic energy and drive reform of the energy market. Putin’s weaponization of energy supplies has exposed the UK’s vulnerability to global market volatility, coupled with a regulatory framework that is no longer fit for purpose, has boosted legislation and dampened economic growth.

Prime Minister Liz Truss said:

Decades of short-term thinking about energy have failed to focus sufficiently on securing supplies.Russia’s war in Ukraine has exposed the shortcomings of our energy security. , is pushing up your bill.

I will act now and tackle the root cause of the problem by increasing the domestic energy supply so that people and businesses are supported by the new Energy Price Guarantee for the next two years.

Extraordinary challenges require extraordinary measures to ensure that the UK never finds itself in a situation like this again.

Many businesses report that their energy costs are projected to increase by more than 500% as businesses do not benefit from energy price caps and cannot always lock in energy prices through fixed deals. increase.

A new six-month plan for businesses and other non-domestic energy users (including public sector organizations such as charities and schools) will provide the same support that is offered to consumers. This can protect your company from rising energy costs and provide the certainty you need to plan your business.

After this initial six-month plan, the government will provide continued and focused support to vulnerable industries. A review will take place within three months to determine where to target to ensure that those most in need receive support.

The government will provide energy suppliers with the difference between this new lower price and what energy retailers would charge their customers if this were not implemented. The scheme, previously funded by the environmental tax, will also continue to be funded by the government during his two years, ensuring continued UK investment in homegrown, safe and renewable technologies.

The intervention is funded by the government, but steps have been taken to significantly reduce costs over time.

• The new Energy Supply Task Force, led by Madeleine McTernan, who led the successful UK Vaccines Task Force, will begin negotiations with domestic and international suppliers to lower the price they charge for energy and increase security of supply. We agreed on a long-term contract. The Task Force and the Business, Energy and Industrial Strategy Division will also negotiate with renewable energy producers to lower the prices they charge.
• The UK Treasury has announced joint plans with the Bank of England to address the extraordinary liquidity requirements facing energy companies operating in the UK’s wholesale gas and electricity markets. Energy market financing schemes enable energy and financial markets and economic stability, reducing the bottom line for businesses and consumers. This scheme provides short-term financial assistance and is designed to be used as a last resort.

Learning from the mistakes of the past, the government is taking action to accelerate domestic energy supply, build energy resilience and reach the goal of making the UK an energy exporter by 2040.

• We expect to begin a new oil and gas licensing round as early as next week, leading to over 100 new licenses.
• Lift the moratorium on UK shale gas production. This allows developers to ask for planning permission when they have local support. This could get him gassed in as early as 6 months.
• We will accelerate the acceleration of new energy sources, from North Sea oil and gas to clean energy such as nuclear, wind and solar.
• With up to 24GW of nuclear power going on by 2050, Great British Nuclear will help set the direction for bringing new nuclear projects online in the UK.
• Undertake fundamental reforms in the structure and regulation of energy markets through recommendations from a new review of the UK Energy Regulations.
• Given the changed economic climate, we will initiate a review to ensure that we are meeting our net zero 2050 goals in an economically efficient manner. It will be chaired by Congressman Chris Skidmore and report by the end of the year to ensure that meeting the goals does not place an undue burden on businesses and consumers.

Prime Minister Kwasi Kwarten said:

Millions of families and businesses across the country can breathe a sigh of relief knowing that the government will be behind them this winter and next.

The cost of inaction would have been far greater than the cost of this intervention. Not only are we able to provide immediate assistance now, but the beauty of our scheme is that it helps bring down inflation and address broader cost of living pressures.

Business and Energy Secretary Jacob Leesmogg said:

The global headwinds caused by Russia’s war in Ukraine, Putin’s weaponization of energy and the aftermath of COVID-19 highlight the need to strengthen Britain’s energy security in the national interest, Millions of homes and businesses will struggle to cover the costs of this bill this winter.

The actions we are taking today will alleviate the burden of worry in the short term, solve the underlying problems in our energy markets and ensure that the people of the UK enjoy affordable and abundant energy in the future. revitalize the long-term reforms that need to be completed in order to