London Daily

Focus on the big picture.
Friday, Jun 20, 2025

Energy bills capped at £2,500 a year from October, Liz Truss announces

Energy bills capped at £2,500 a year from October, Liz Truss announces

In the first major policy announcement of her premiership, Liz Truss says the new price guarantee will last for two years and save the average household in England, Wales and Scotland £1,000 a year on future bills.

A typical household will pay no more than £2,500 annually for its gas and electricity bills from the start of October, Prime Minister Liz Truss has announced.

In the first major policy announcement of her premiership, Ms Truss said the new price guarantee will last for two years and save the average household in England, Wales and Scotland £1,000 a year on future bills.

The same level of support will be provided to Northern Ireland, where a separate energy market operates.

"This is the moment to be bold. We are facing a global energy crisis and there are no cost-free options," the PM told the Commons.

The policy, which Downing Street believes will curb inflation by up to five percentage points and will be enacted through emergency legislation, builds on the £400 payment to households set out by former chancellor Rishi Sunak earlier this year.

A six-month scheme for businesses, schools and hospitals will provide equivalent support over the winter.

Further targeted support for specific industries like hospitality is set to follow after that, with a review in three months to decide which sectors should benefit.

There is currently no cap on energy costs for businesses and a specific figure on support has not been given due to differences in how the wholesale energy market operates compared to the retail market.

The price guarantee will not affect those on fixed contracts for their energy, but ministers are confident discounts will be offered to those customers in due course after talks with suppliers.


Warning that plan won't 'come cheap'


The move, expected to cost tens of billions, will be funded through more government borrowing. Chancellor Kwasi Kwarteng is due to lay out the expected costs in his fiscal statement later this month.

Labour argues a freeze on bills should be paid for through a windfall tax on the profits of oil and gas producers instead, something the PM has dismissed out of hand.

Party leader Sir Keir Starmer said the plan will not "come cheap" and the PM's discounting of a windfall tax shows she is "driven by dogma" and "it's working people who will pay for that".

The PM says the price guarantee supersedes the existing price cap, with the government limiting the price suppliers can charge customers for units of energy.


Energy suppliers will be given the difference between the new lower price and what they would charge if the guarantee was not in place.

The price cap, which currently means average household bills should be no more than £1,971, was due to rise in October to more than £3,500 and further still when the next level was due to be set in January.

Forecasts have said it could have gone as high as £7,700 by next April.

Fracking ban lifted as part of moves to increase energy supply


The new price guarantee is based on the existing price cap, combined with the £400 bills discount for all households, meaning costs will be similar to those facing the public today.

Ms Truss said the cost of the extra support would be offset by increasing energy supply and launching an energy taskforce, as she pledged to make the UK a net exporter of energy by 2040.

"We are also accelerating all sources of domestic energy, including North Sea oil and gas production," the PM said.

"We will be launching a new licensing round which we expect to lead to over 100 new licences being awarded."

As part of these longer term plans to address the energy crisis, the PM also announced she is ending the moratorium on fracking.

It means shale gas extraction is set to be given the green light in places where it is backed by residents.

The commitment to net zero remains, although there will be a review to ensure the policy is delivered by 2050 "in a way that is pro-business and pro-growth".

"This is part of my vision for rebuilding our economy - secure energy supply is vital to growth and prosperity, yet it has been ignored for too long," the PM said.

"I will end the UK's short-termist approach to energy security and supply once and for all."

Newsletter

Related Articles

0:00
0:00
Close
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
UK Home Secretary Apologizes Over Child Grooming Failures
Trump Organization Launches 5G Mobile Network and Golden Handset
Towcester Hosts 2025 English Greyhound Derby Amid Industry Scrutiny
Gary Oldman and David Beckham Knighted in King's Birthday Honours
Over 30,000 Lightning Strikes Recorded Across UK During Overnight Storms
Princess of Wales Returns to Public Duties at Trooping the Colour
Red Arrows Use Sustainable Fuel in Historic Trooping the Colour Flypast
Former Welsh First Minister Addresses Unionist Concerns Over Irish Language
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
France Bars Israeli Arms Companies from Paris Defense Expo
King Charles Leads Tribute to Air India Crash Victims at Trooping the Colour
Jack Pitchford Embarks on 200-Mile Walk to Support Stem Cell Charity
Surrey Hikers Take on Challenge of Climbing 11 Peaks in a Single Day
UK Deploys RAF Jets to Middle East Amid Israel-Iran Tensions
Two Skydivers Die in 'Tragic Accident' at Devon Airfield
Sainsbury's and Morrisons Accused of Displaying Prohibited Tobacco Ads
UK Launches National Inquiry into Grooming Gangs
Families Seek Closure After Air India Crash
Gold Emerges as Global Safe Haven Amid Uncertainty
Trump Reports $57 Million Earnings from Crypto Venture
Trump's Military Parade Sparks Concerns Over Authoritarianism
Nationwide 'No Kings' Protests Challenge Trump's Leadership
UK Deploys Jets to Middle East Amid Rising Tensions
Trump's Anti-War Stance Tested Amid Israel-Iran Conflict
Germany Holds First Veterans Celebration Since WWII
U.S. Health Secretary Dismisses CDC Vaccine Advisory Committee
Minnesota Lawmaker Melissa Hortman and Husband Killed in Targeted Attack; Senator John Hoffman and Wife Injured
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
×