UK energy bills frozen for two years

9th September 2022


The new UK prime minister Liz Truss has announced that household energy bills will be frozen at an average of £2,500 a year for two years during the cost-of-living crisis.

From 1 October, a new ‘energy price guarantee’ will limit the price suppliers can charge customers for units of gas, while temporarily removing green levies, worth around £150, from household bills.

This will save the average home £1,000 a year, based on current energy prices, and comes in addition to a £400 discount, which together will bring costs close to where the energy price cap stands today.

The government estimates that the historic intervention will boost growth and curb inflation by 4% to 5%, reducing the cost of servicing the national debt.

Truss said that “decades of short-term thinking” have threatened the UK's energy security, which has been exacerbated by Russia's war in Ukraine. “I’m ending this once and for all,” she declared.

“I’m acting immediately so people and businesses are supported over the next two years, with a new energy price guarantee, and tackling the root cause of the issues by boosting domestic energy supply.

“Extraordinary challenges call for extraordinary measures, ensuring that the UK is never in this situation again.”

The government will provide energy suppliers with the difference between lower prices, and what energy retailers would charge their customers were they not in place.

Schemes previously funded by green levies will also continue to be funded by the government during the two-year period to ensure the UK’s investment in home-grown, secure renewable technologies continues.

Furthermore, as businesses have not benefited from an energy price cap, a new six-month scheme will offer equivalent support as is being provided for consumers.

The announcements are likely to be among the most important of Truss' premiership, which began just days ago.

Reacting to her appointment, IEMA's CEO Sarah Mukhjerjee MBE, said: “IEMA congratulates Liz Truss on becoming the new leader of the Conservative Party and prime minister of the UK. We look forward to working with her new government.

“Clearly the cost-of-energy crisis will be at the top of the new PMs in tray and we would reiterate that tackling this requires a three-pronged approach. Directly supporting bill payers, taking urgent steps to ensure secure energy supplies, and raising the bar on the energy efficiency of our building stock.

“Moreover, we need the new PM to steady the ship on efforts to ensure that the UK reaches its 2050 net-zero target and other targets spilling out of the Environment Act.”

Image credit: iStock

Subscribe

Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.


Transform articles

EU and UK citizens fear net-zero delivery deficit

Support for net zero remains high across the UK and the EU, but the majority of citizens don't believe that major emitters and governments will reach their climate targets in time.

16th May 2024

Read more

There is strong support for renewable energy as a source of economic growth among UK voters, particularly among those intending to switch their support for a political party.

16th May 2024

Read more

Taxing the extraction of fossil fuels in the world’s most advanced economies could raise $720bn (£575bn) by 2030 to support vulnerable countries facing climate damages, analysis has found.

2nd May 2024

Read more

The largest-ever research initiative of its kind has been launched this week to establish a benchmark for the private sector’s contribution to the UK’s 2050 net-zero target.

2nd May 2024

Read more

The Scottish government has today conceded that its goal to reduce carbon emissions by 75% by 2030 is now “out of reach” following analysis by the Climate Change Committee (CCC).

18th April 2024

Read more

While there is no silver bullet for tackling climate change and social injustice, there is one controversial solution: the abolition of the super-rich. Chris Seekings explains more

4th April 2024

Read more

Alex Veitch from the British Chambers of Commerce and IEMA’s Ben Goodwin discuss with Chris Seekings how to unlock the potential of UK businesses

4th April 2024

Read more

Five of the latest books on the environment and sustainability

3rd April 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close