British Prime Minister Liz Truss is expected to announce a multi-pronged plan on Thursday to protect households and businesses against crippling costs while increasing domestic energy supply.
As part of a package to ease the cost of living, the new prime minister is expected to tell MPs that domestic bills will be frozen at about £2,500 ($2,882).
Ms Truss rejected the idea of applying a windfall tax on the profits made by oil and gas companies to cover the cost – reported to be up to £150 billion — with the support expected to be funded through borrowing.
Labour has accused the prime minister of writing a “blank cheque” to the energy giants by ruling out the levy, with the British people left to “foot the bill”.
The prime minister was also expected to announce the resumption of shale gas fracking after it was stopped in 2019, a policy she signalled during her Conservative leadership campaign.
Cabinet minister Simon Clarke told Sky News the government had to "look at every source" to increase Britain's energy supplies, including taking another look at fracking.
The Times reported that ministers were meanwhile preparing a public information campaign to encourage people to use less energy this winter.
Such a push, echoing the European Union's mandate to reduce gas consumption by 15 per cent, would be a break with Boris Johnson's government which declined to offer energy-saving advice.
Ahead of Thursday’s announcement, Ms Truss said families and businesses across the country were concerned about how they would “make ends meet” in 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,” Ms Truss 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.”
The UK's energy crisis - video
Eyes on: The UK's energy crisis
Downing Street said she would set out a “bold plan of action to support people across the UK”, while also increasing domestic energy supply.
Going head to head with Sir Keir Starmer at her first Prime Minister’s Questions, Ms Truss said she would make an announcement on her cost-of-living proposals to the House on Thursday.
But she faced accusations that she was avoiding scrutiny over the way her plans would be presented to Parliament.
Ms Truss 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 proposal to freeze bills, valued by the party at £29bn.
Liz Truss's political career - in pictures
Shadow climate change secretary Ed Miliband said the question of who pays was “core” to any solution.
“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 £170bn in excess profits, and the British people will foot the bill,” Mr Miliband said.
“Every penny her government refuses to raise in windfall taxes is money that they will be loading on to the British people for years to come.”
On Wednesday, Ms Truss’s official spokesman said the existing windfall tax imposed under Mr Johnson still stands, despite her 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 policy 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.
She began PMQs by striking a conciliatory tone, promising to work with MPs across the House to deal with “the challenges we face”, at a “vital time for our country”.
But her clash with Sir Keir showed clear dividing lines on fiscal policy, with Ms Truss determined to scrap planned increases in corporation tax.
“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," Sir Keir said.
"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?'”
Ms Truss told him: “I will take immediate action to make sure we have lower taxes and we grow the economy, and that way I will ensure we have a positive future for our country and we get Britain moving.”
Meanwhile, she has continued to make appointments to her government – with several MPs who supported Rishi Sunak in the leadership race awarded ministerial posts.
