Ms. Truss has promised “immediate” action to relieve the pressure on struggling families as the results of the Tory leadership battle are expected at midday.
Speculation is mounting that she will opt for a bold furlough-style move – possibly by loaning companies money to hold down costs.
The plan emerged as wholesale gas prices soared again this morning, by around 30 per cent, following Russia’s decision to shut down a key gas pipeline.
Chancellor-in-waiting Kwasi Kwarteng has already been scrambling to reassure markets that although government borrowing will be ‘looser’ it will remain ‘responsible’. Ms Truss has also promised a wave of tax cuts aimed at boosting economic growth.
Ms Truss told the BBC yesterday that she will reveal fresh supports for struggling households within a week, but refused to spell out details.
‘Before you have been elected as prime minister, you don’t have all the wherewithal to get the things done,’ she told the Sunday with Laura Kuenssberg programme.
‘This is why it will take a week to sort out the precise plans and make sure we are able to announce them. That is why I cannot go into details at this stage. It would be wrong.’
British energy producers witnessed another huge rise in wholesale prices today, with gas prices surging by 20 to 30 per cent this morning.
The increase comes after a last-minute decision by Russia’s state-backed energy firm Gazprom to block the reopening of the key Nord Stream 1 pipeline to Europe.
The UK natural gas price was at £4.96 per therm this morning, up 86p or 21 per cent. At the start of 2021 it was at just 40p per therm. The price touched £7 per therm last week.
And the leading European benchmark Dutch TTF October gas contract rose by €62 (£52.53), or 30 per cent, to €272 per megawatt hours (MWh) by about 7.30am today, reversing losses seen last week.
Nord Stream 1 is the biggest gas link from Russia to Europe, supplying around 55billion cubic metres per year.
While the UK receives only 4 per cent of its gas from Nord Stream 1, other countries such as Germany are much more reliant on the pipeline, meaning its closure is causing prices to spike on international energy markets.
The move has raised fears factories could be forced to adopt a four-day working week to conserve energy. No date has yet been set for when Nord Stream 1 will be reopened.
Liz Truss has vowed ‘immediate’ action to ease the pressure on struggling families
The plan emerged as wholesale gas prices soared again this morning, by around 30 per cent, following Russia’s decision to shut down the key Nord Stream 1 gas pipeline
Energy bills are set to soar again in October, with fears many families will be unable to pay
The move, according to Bill Farren-Price, head of macro oil and gas research and energy consultancies Enverus, will undoubtedly raise prices after Russia failed to reopen the pipeline.
But it’s becoming very obvious to anyone keeping an eye on these markets that Russia could weaponize its gas exports at this point and cut off the continent’s supply completely.
“And I think that’s what people are worried about today. The crunch time will come in the winter when, if it’s exceptionally cold, demand for gas across Europe and even the UK will surpass what can be imported.
‘It’s going to send prices back up to highs that we saw at the end of August or even beyond.’
Meanwhile the FTSE 100 benchmark index of leading companies fell by 64 points or 0.88 per cent to 7,217.43 this morning, and sterling dipped further against the dollar.
According to Derek Lickorish, chairman of Utilita, which provides electricity to 800,000 homes, Gordon Brown made a £500 billion facility available to save the banks on October 8, 2008, when the banking system collapsed.
And it’s past time for the government to help energy consumers, including both household and commercial users.
And I think the total would be, if this is what we’re going to do – and I must emphasize that we don’t know – but if we were to do it, it would cost somewhere between £60 and £100 billion to freeze rates for all customers for around a year.
‘But of course we don’t know what’s going to happen to the price increase from January 1 and gas is going to peak today. That means that prices start getting baked in not only to January cap, but also to the April one as well – and that could well have a ‘6’ in front of it.’
Mr Kwarteng used an article in the Financial Times to stress that the next Government will behave in a ‘fiscally responsible’ way.
Mr Kwarteng, the current Business Secretary, said that there would be ‘some fiscal loosening’ in a Truss administration to help households through the winter, stressing that it was the ‘right thing’ to do.
He said that the UK does not need ‘excessive fiscal tightening’, pointing to the UK’s ratio of debt to GDP compared to other major economies.
‘The OECD has said that the current government policy is contractionary, which will only send us into a negative spiral when the aim should be to do the opposite. But I want to provide reassurance that this will be done in a fiscally responsible way. Liz is committed to a lean state and, as the immediate shock subsides, we will work to reduce the debt-to-GDP ratio over time,’ he wrote.
Mr Kwarteng, a close political and ideological ally of Ms Truss, offered a vision for how he would operate the Treasury as he said that the next Government would be ‘decisive and do things differently’.
‘That means focusing on how we unlock investment and growth, rather than how we tax and spend. It is about growing the size of the UK economy, not burying our heads in a redistributive fight over what is left,’ he wrote.
His comments directly echo those of Ms Truss on Sunday, as she insisted that her plan to reverse the rise in national insurance is ‘fair’ despite it directly benefitting higher earners.
She told the BBC ‘growing the economy benefits everybody’ and it is ‘wrong’ to look at everything through the ‘lens of redistribution’.
Labour seized on the indication to accuse the Tories of stealing their ideas.
Frontbencher Nick Thomas-Symonds told the BBC’s Westminster Hour that it was once again another example of his party ‘making the political weather’.
The new Conservative leader will be announced just after midday in central London.
Both candidates have spent more than a month traversing the country taking part in hustings in a bid to win over the 200,000 party members.
The winner will be installed tomorrow, becoming the third Conservative prime minister since 2016, when David Cameron quit after losing the Brexit vote.
Chancellor-in-waiting Kwasi Kwarteng has already been scrambling to reassure markets that although government borrowing will be ‘looser’ it will remain ‘responsible’
Rishi Sunak (pictured yesterday) is expected to be defeated by Liz Truss in the Tory leader battle
Boris Johnson will remain in Downing Street until the formal handover tomorrow
They face a chilling in-tray, with the standoff with Russia hammering the economy and deep party splits about the legacy of Boris Johnson.
The formal announcement will be made by Sir Graham Brady, chairman of the 1922 Committee of Conservative backbench MPs.
Following the announcement, the new leader is anticipated to deliver a speech before spending the rest of the day deciding which candidates to nominate for Cabinet and other ministerial positions as well as for preparing their first prime ministerial speech.
Mr. Johnson urged his party to rally behind the contest’s victor over the weekend.
He declared in the Sunday Express that “now is the time for every Conservative to unite — and support that new leader unreservedly.”
In a departure from custom, Mr. Johnson and his successor will travel to Balmoral, not Buckingham Palace, on Tuesday to receive the next prime minister’s appointment after the contest’s outcome is known.
Described by allies as likely to be a ‘very sad’ occasion for the outgoing prime minister, the Queen will receive Mr Johnson on Tuesday at her Aberdeenshire home, where he will formally tender his resignation.
This will be followed by an audience with the new Tory leader, where she or he will be invited to form a government.