Energy bills will be frozen at an average of £2,500 for two years in the run-up to the next general election as families battle the cost-of-living crisis. The energy price cap will be scrapped and replaced with a new “energy price guarantee”, easing pressure on households.
A scheme for businesses, schools, hospitals, other public organisations and charities will “offer equivalent support” but last for just six months and “Vulnerable” industries will receive longer-term support that will be set out later. A review in three months will decide which sectors should receive ongoing help.
The Government will wait until an emergency Budget this month to set out how much the vast intervention will cost, but estimates suggest it could be up to £150bn. It will be funded by extra public borrowing - piling the cost onto taxpayers eventually.
The Government will also remove green levies, worth £150, from energy bills but continue to fund projects to boost renewables. Ministers will press on with a £400 bills discount that has already been announced. Together, the moves should mean the amount average households pay is close to the current £1,971 price cap.
Under this scheme, a typical UK household will pay no more than £2,500 a year on bills for two years from October 1. This includes the removal of green levies, which add about £150 a year to your bills, for two years.
Also, all bill-payers will still get an already-announced £400 discount this winter. It’s spread over six months from October to March and should bring your bill over the next year down to about £2,100. There’s also £650 for benefit claimants (£324 already paid), £300 for pensioners and £150 for disabled people. But none of these payments are pledged for winter 2023/24. That means, as things stand currently, you’ll have to find much more cash next winter than this winter.