Liz Truss ‘strongly considering freeze for energy bills due to economic squeeze’

Foreign secretary widely tipped to win Tory leadership on Monday

Liz Truss is strongly considering freezing energy bills in a bid to ease the burden on households this winter, according to reports.

The foreign secretary is widely expected to win the Conservative leadership race on Monday, before being handed the keys to No 10 the following day.

Ms Truss had remained tight-lipped into Sunday about what kind of support package she might introduce as the UK faces the prospect of soaring energy bills amid the cost of living crisis.

But reports on Monday suggest Ms Truss could introduce an energy bills freeze in some form, with the The Times reports the package could be on the scale of the furlough scheme introduced by then-chancellor Rishi Sunak.

“The plan is to introduce some kind of artificial price cap for consumers combined with a mechanism for reimbursing suppliers,” one source told the paper. “Plans are reasonably well advanced and involve not just civil servants but also ministers lined up for jobs by Truss.”

Businesses struggling with soaring energy bills are said to be in line for additional help. The scale of the Truss support package could be “at least” around the £69bn price of the Covid furlough scheme.

Ms Truss did not deny a package of support could amount to £100bn on the BBC on Sunday. She said she would within a week reveal fresh supports for struggling households, but repeatedly declined to spell out what those measures might look like.

“Before you have been elected as prime minister, you don’t have all the wherewithal to get the things done,” she told Sunday with Laura Kuenssberg. “This is why it will take a week to sort out the precise plans ... That is why I cannot go into details at this stage. It would be wrong.”

It comes as Kwasi Kwarteng, widely tipped to be the next chancellor if Ms Truss is successful on Monday, used an article in the Financial Times to stress that the next government will behave in a “fiscally responsible” way.

Mr Kwarteng 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.

Kwasi Kwarteng (PA)

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,” he wrote.

The senior Tory figure added: “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.”

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 accused the Tories of stealing their ideas for a price cap freeze. Labour’s Steve Reed said Ms Truss (or Mr Sunak) could “do a lot worse” than to adopt the party’s plan to freeze energy bills for six months.

The shadow justice secretary told BBC Breakfast: “It’s extraordinary that one of them will walk into Downing Street today with no idea what they’re going to do to help people. Now Labour’s winning the battle of ideas here, Labour’s come up with a fully-costed plan.”

The announcement of the next Conservative leader is scheduled for early afternoon around 12.30pm at an event in central London on the same day parliament returns.

The new leader is expected to make a speech following the announcement, before spending the rest of the day finalising their choices for Cabinet and wider ministerial roles and writing their first prime ministerial speech.

Senior Tory MP Sir Geoffrey Clifton-Brown urged his party to support whatever energy plan the next PM announces: “I would hope that all my colleagues when Liz Truss or Rishi Sunak, whichever of the two of them it is, announces a plan, that they will get behind it and support it.”

Over the weekend, Mr Johnson urged his party to unite behind the contest’s winner. “This is the moment for every Conservative to come together – and back that new leader wholeheartedly,” he wrote in the Sunday Express.

Once the result of the contest is known, Mr Johnson and his successor will go to Balmoral, rather than Buckingham Palace, for the appointment of the new prime minister on Tuesday, in a break from tradition.

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.