Truss set to announce ‘bold’ plan to tackle energy crisis today

ITV News Deputy Political Editor Anushka Asthana reflects on Liz Truss's first full day as PM

Prime Minister Liz Truss is set to announce her "bold" plan to help households and businesses through the energy crisis this morning.

The new PM is expected to tell MPs on Thursday that domestic bills will be frozen at around £2,500 as part of a package to ease the cost of living crunch, in a policy that could define her time in office just days into the job.

The suggestion is it will be funded through borrowing, with Ms Truss rejecting the idea of applying a windfall tax on the bumper profits made by oil and gas companies to cover the cost.

Analysts have estimated the policy could cost as much as £150bn depending on how long the crisis continues.

For comparison, the furlough scheme cost £70bn, which was considered staggeringly expensive at the time and was one of the most costly policies every implemented by a British government.

The Chancellor has said borrowing will need to increase to pay for the policy. Credit: PA

Labour has accused the PM of writing a "blank cheque" to the energy giants by ruling out the levy, with the British people left to "foot the bill".

Ahead of Thursday’s announcement, Ms Truss acknowledged families and businesses across the country are concerned about how they will "make ends meet" over the coming months.

She blamed rising global prices on Russian president Vladimir Putin’s war in Ukraine and "weaponisation" of gas supply in Europe.

"This has only made clearer that we must boost our long-term energy security and supply," she said.

"We will take action immediately to help people and businesses with bills but also take decisive action to tackle the root cause of these problems, so that we are not in this position again.

"We will set out our plans to deliver on that promise and build a prosperous Britain for everyone."

Going head-to-head with Sir Keir Starmer at her first Prime Minister’s Questions, Ms Truss confirmed she would make an announcement on her cost-of-living proposals to the House on Thursday.

However, she faced accusations she was dodging scrutiny over the way her plans would be presented to Parliament.

She will open a debate on energy costs but, unlike a formal ministerial statement, this will not result in sustained questioning from MPs about the move.

Labour said the "only fair" answer to the crisis is its own proposal to freeze bills, valued by the party at £29 billion.

Shadow climate change secretary Ed Miliband argued that "core" to any solution is the question of "who pays".

"By ruling out a windfall tax, Liz Truss, in one of her first acts as prime minister, has written a blank cheque to the oil and gas giants making £170 billion in excess profits, and the British people will foot the bill," he said.

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"Every penny her government refuses to raise in windfall taxes is money that they will be loading onto the British people for years to come."

On Wednesday, the prime minister’s official spokesman said the existing windfall tax imposed under Mr Johnson still stands, despite Ms Truss’s opposition to such levies.

Downing Street also indicated the moratorium on fracking in England could be lifted in the energy package, despite the 2019 Conservative manifesto opposing an end to the ban without science showing it can be done safely.

Ms Truss vowed during her leadership campaign that she would end opposition to shale gas extraction in places where it is backed by local communities.

In a sign of the political battles to come, the Labour leader said: "There’s nothing new about the Tory fantasy of trickle-down economics, nothing new about this Tory prime minister who nodded through every decision that got us into this mess and now says how terrible it is, and can’t she see there’s nothing new about a Tory prime minister who when asked who pays says ‘it’s you, the working people of Britain’?"