Later today, Ms Truss is expected to announce a freeze on bills at a cap of £2,500 a year as one of her first acts in her new role. This move could be a lifeline to the millions of households facing fuel poverty, as the figure is over £1,000 less than Ofgem’s £3,549 price cap the industry regulator announced for October, an 80 percent rise from current levels. However, commentators warned that the new Prime Minister risks situation energy has to be rationed by the Government in the form of blackouts.
Writing in the Telegraph, columnist Juliet Samuel slammed the plan as a “recipe for blackouts”.
She warned that “Dulling the incentive for people to save energy this winter will only result in state-directed rationing”.
Experts have dismissed the idea that people won’t save energy this winter, with Renaud Foucart, a Senior Lecturer in Economics at Lancaster University, noting that with prices already at record levels, households will look to save energy in order to cut costs.
He noted that rationing was already taking place through astronomical energy bills for households and businesses.
He said: “Bills so high firms stop producing. Households cut as much as possible.
“Some people have to choose between food and heating. Brutal free market, ‘efficient’ and unfair without massive cash transfers.”
Under Ms Truss’ reported plans, the energy bills will be capped at £2,500, up from £1,971 in April, and more than double the £1,138 figure that consumers were paying in April 2021, before the crisis took hold.
Ms Samuel slammed the plan for “throwing vast sums of money at the rich” rather than offering targeted help.
She noted that the first of the “damaging consequences” was that “it removes the incentive to reduce energy usage.
“Prices are telling us that we are desperately short of energy and need to reduce demand.
READ MORE: ‘Terrible idea!’ Truss’ energy plans torn apart