The existing £400 energy grant to all households and £650 extra support to some more vulnerable households will continue under these proposals. In her statement to the Commons, Truss also said this “price freeze” would last for two years. But businesses, while in line for what he called “equivalent support” – with limited unit costs – will only be guaranteed help for six months. After that, help will be offered on a case-by-case basis, which will likely prove controversial. There is already a windfall tax on energy companies – the big companies that extract oil and natural gas, as opposed to the often cash-strapped energy providers. While the “up-and-coming” energy giants are making healthy profits, many of the “regeneration” customer-facing providers, facing high wholesale prices but a cap on what they can charge, have collapsed. From May, oil and gas producers operating in the UK are subject to an additional 25% levy on energy profits, with many paying 65% tax – albeit with generous breaks if profits are reinvested in additional capacity. Truss rightly rejected Labour’s claim that “UK businesses have made £170 billion in windfall profits which could more than pay for this whole energy package”. This figure represents the combined global profits of all companies with even tenuous links to the UK energy industry. That said, ministers are not ruling out additional levies on North Sea operators as a whole. This is because no one knows how much this energy package will cost. If wholesale prices rise more than expected, it becomes more expensive to deliver the announced price cap to households and businesses. The bill could eventually get out of hand. That said, if wholesale prices continue to drop significantly, as they have in the last fortnight, this pack will cost a lot less. What is clear is that the UK’s energy policy will become much tougher – with Truss lifting the ban on fracking, as well as suspending household levies for renewable energy. We’ll be hearing a lot more about new nuclear capability as energy security comes to the fore. What we will see, however, is self-imposed energy allocation as businesses curtail operations and households try to use less. This energy support package can prevent widespread impoverishment and bankruptcy. But it won’t save us from horrendous bills this winter and severe energy cuts. Follow Liam on Twitter @liamhalligan
