Liz Truss to freeze household energy bills for 18 months

UK’s incoming prime minister Liz Truss is planning to freeze household energy bills at the current level for this winter and next, paid for by government-backed loans to energy suppliers, the BBC reported on Tuesday.

“Energy companies would take out government guaranteed loans to bridge the gap between the wholesale price in the market and the fixed price they are charging customers,” the BBC said during a news bulletin citing its business editor.

“Those loans would be repaid over the next 10 to 20 years through supplements to customer bills.”

The scheme could cost between 100 billion and 130 billion pounds ($116-151 billion), it said.

The government was also working on a support package for businesses, but it was likely to be more complex and would be reviewed more frequently, the BBC said.

Factbox: What will Liz Truss do as UK prime minister? 

Liz Truss, who will be appointed prime minister by Queen Elizabeth on Tuesday, has pledged to immediately tackle energy bills which are due to soar next month and are causing a cost-of-living crisis for millions of households and threatening the survival of businesses.

“I will deliver on the energy crisis, dealing with people’s energy bills, but also dealing with the long-term issues we have on energy supply,” she said on Monday.

A source familiar with the situation told Reuters on Monday that Truss was considering a freeze on household energy bills lasting until at least January, when a new price cap on energy prices will come into force.