Therese Coffey dodges demands for clarity on Truss energy plan

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Later today, Ms Truss is expected to announce a freeze on bills at a cap of £2,500 a year as one of her first acts in her new role. This move could be a lifeline to the millions of households facing fuel poverty, as the figure is over £1,000 less than Ofgem’s £3,549 price cap the industry regulator announced for October, an 80 percent rise from current levels. However, commentators warned that the new Prime Minister risks situation energy has to be rationed by the Government in the form of blackouts.

Writing in the Telegraph, columnist Juliet Samuel slammed the plan as a “recipe for blackouts”.

She warned that “Dulling the incentive for people to save energy this winter will only result in state-directed rationing”.

Experts have dismissed the idea that people won’t save energy this winter, with Renaud Foucart, a Senior Lecturer in Economics at Lancaster University, noting that with prices already at record levels, households will look to save energy in order to cut costs.

He noted that rationing was already taking place through astronomical energy bills for households and businesses.

He said: “Bills so high firms stop producing. Households cut as much as possible.

“Some people have to choose between food and heating. Brutal free market, ‘efficient’ and unfair without massive cash transfers.”

Under Ms Truss’ reported plans, the energy bills will be capped at £2,500, up from £1,971 in April, and more than double the £1,138 figure that consumers were paying in April 2021, before the crisis took hold.

Ms Samuel slammed the plan for “throwing vast sums of money at the rich” rather than offering targeted help.

She noted that the first of the “damaging consequences” was that “it removes the incentive to reduce energy usage.

“Prices are telling us that we are desperately short of energy and need to reduce demand.

“When you dull that signal for everyone, including the most profligate, you leave no reason for them to economise.

“The relative attractiveness of energy efficiency measures will not rise as it should.”

Instead, she warned that the Government will have to “rely upon state-directed rationing”, by imposing blackouts.

Countries across Europe are imposing energy savings measures, as Russia’s invasion of Ukraine has threatened gas supplies.

The EU is scrambling to shore up its energy supplies for winter, and has been imposing energy savings measures like turning off lights in government buildings.

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In July, energy ministers from the 27 EU member states, except Hungary, backed a voluntary 15 percent reduction in gas usage over the winter.

This target could become mandatory if Russia ordered a complete shutdown of gas to Europe.

Ms Samuel warned that the UK will not be able to rely on Europe of gas this winter like it normally does.

As a result, “heavy industry will be shut down, with dire consequences for growth and jobs, and we’ll see street lights dimmed and offices forced to use power sparingly.”

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