Under Liz Truss’ proposed bill freeze, taxpayers might foot the price for £1.6 billion in profits for energy companies.
On the day the Queen passed away, the PM launched a massive scheme that would cap normal household expenses at £2,500 for the next two years.
The government hasn’t provided a cost estimate for the idea, but experts think that depending on gas prices, it might cost far over £150 billion.
The current profit ceiling imposed by Ofgem on domestic energy supplies is 1.9%. According to The Telegraph, the government might incur bills of £80 billion over the next year, with businesses earning around £1.6 billion in profits.
The alternative to the freeze, according to a government source, would be for families to start paying £7,000 a year for energy in April.
They also emphasised that even if the government did not intervene, each individual Briton would still contribute to the profits for energy companies.
‘Most suppliers haven’t been earning any money with current profit margin,’ a spokeswoman for Energy UK told the Daily Telegraph. ‘Thirty suppliers went out of business last fall.
According to Ms. Truss’ testimony to the Commons last week, the government would maintain average household expenditures at £2,500 per year until October 2024, which is less than half the amount that many people had anticipated they would reach.
The majority of consumers should see no change from their current expenses this year, even with the already promised £400 giveaway.
The assistance, which will be put into place through central contracts with suppliers, is expected to result in families saving £1,150 on average over the course of the following year, according to the government.
Labour’s demands for a new windfall tax on large energy companies to help pay for the freeze were rejected by Ms. Truss.
The fracking moratorium is scheduled to be lifted immediately, and a new age of oil and gas exploration in the North Sea will begin as a result of her declaration that reform is necessary to prevent the nation from finding itself in a similar situation again.