Liz Truss’ energy plan looks pitch-perfect
If the reports are right – Liz Truss’s plan to freeze energy bills at £2.5k for the next two years looks (almost) pitch perfect. Take into account the £400 already given and households are left funding only £200 of the £1500 price rise that’s just weeks away – and then no more for two whole winters. That’s going to be very welcome to so many people – there may even be a snap election announced shortly afterwards – you can’t rule it out. This will be a massively popular intervention.
This is exactly what we’ve been calling for in the Express, significant intervention to ‘fund the unaffordable gap’ in energy bills.
Support for businesses surely has to come next – it’s not complex – we can use the methodology of the household price cap – we have the models and experience to do that.
Freezing energy bills is step one – that gets homes and businesses through this winter and next. That’s perfect. The next steps should be to reduce energy bills at source.
My top tip is a price cap on Britain’s North Sea gas – half our gas comes this way and right now we pay ten times more for it than we need to. Or used to, just last year for example. There’s no good reason for that.
Next top tip is reform the market so that the price of gas electricity are not linked, it’s an absurd ‘free market’ mechanism that serves no good purpose – end it and 60% of our electricity could return to normal prices.
Do both and we could rewind energy bills to their pre crisis level level. This would deal with the problem at source. And save us all a shed load of money. For now though, credit where it’s due – I think Truss has nailed it. If reports are true.