Incoming prime minister Liz Truss is planning to fix annual energy bills for households at the current cap, it was reported on Tuesday.
Gas and electricity bills, which are currently capped at £1,971, are set to soar by 80% to £3,548 from October.
In response, Truss – who will be formally appointed by the Queen later on Tuesday before naming her new cabinet – is understood to be have drafted plans that will effectively abolish the current pricing regime, Bloomberg reported. Energy regulator Ofgem, which sets the cap in response to wholesale prices, will also be side-lined, the article added.
Instead, ministers will set a unit price that households pay for electricity and gas, Bloomberg said, citing unnamed officials and advisors who have been briefed on the plan. The policy could cost as much as £130bn over the next 18 months, Bloomberg said.
Outgoing prime minister Boris Johnson finally left Downing Street on Tuesday morning after Truss beat Rishi Sunak to become the next Conservative Party leader on Monday. Johnson was forced to resign in early July after around 50 members of his government quit.
