Paul Johnson, head of the Institute for Fiscal Studies (IFS), urged the prime minister to abandon plans to keep everyone’s accounts until 2024 and find a smarter solution to the crisis. The call comes after the government was heavily criticized for failing to reveal the expected cost of a two-year freeze ahead of an expected “mini budget” next week. Mr Johnson called the decision “extraordinary”, saying: “This could actually turn out to be the biggest single budget announcement in my lifetime because it could cost £150 billion.” He agreed that freezing “may be necessary” for this winter, but warned: “It’s incredibly expensive. It is completely wrong. “It’s giving large sums of money to people who don’t need it and it means we’re not dealing with the price tag that there’s less gas out there. And yet, we are massively subsidized for the use of natural gas.” Mr Johnson told Times Radio: “One of the things I’m really hoping for is that they’ll have groups of people working next year to come up with something better for next winter.” Mrs Truss staged a spectacular U-turn, just two days after becoming Prime Minister, announcing that average annual household bills would freeze at £2,500 by 2024. They were due to rise to £3,549 from next month and more than £5,000 next year – threatening millions of people with bills they could not pay. Full details of how the ‘energy price guarantee’ will work have yet to emerge as the announcement was scuttled shortly after the Queen’s death. The government will cover the cost – through a borrowing jump – of capping the amount energy companies can charge customers for a single unit of natural gas. The £400 discount on all bills announced earlier this year has been retained, cutting £66 every month from October to April, and green fees are suspended, saving the average household around £150 a year. The Resolution Foundation think tank has put the price tag at £120 billion – the bill for the household bailout alone, with separate tens of billions needed to bail out businesses. Although it’s called a ‘guarantee’, people in large houses or flats will inevitably pay a lot more. Ms Truss downgraded her planned emergency budget to a “fiscal event” – to avoid scrutiny by the Office for Budget Responsibility (OBR) – which was signed up for next week. He is expected to fly to New York for the UN leader’s meeting as early as Monday night, within hours of the Queen’s funeral, returning to the UK late Wednesday or early Thursday. This will allow the mini-budget to take place on Thursday next week, before parliament breaks up again for Labor and Conservative conferences.
