Liz Truss speaks at the Queen Elizabeth II Centre, London, after being announced as the new Conservative party leader and next Prime Minister.

Truss’ plans for tackling energy crisis to be unveiled this week

Image credit: PA Media

New UK prime minister Liz Truss today confirmed that she would set out the details of her package of support to deal with soaring energy bills on Thursday.

Liz Truss used her first appearance at Prime Minister’s Questions (PMQs) today to promise to work with MPs across the House to tackle “the challenges we face” at a “vital time for our country” and to deliver action to give consumers "certainty" over soaring energy costs.

Truss confirmed that her plan - which is expected to freeze household bills at around £2,500 - will be set out in Parliament.

However, she rejected the idea of using a windfall tax on the bumper profits made by oil and gas giants to fund her package - which will reportedly cost the UK up to £150bn - indicating that she intends to instead push the burden onto taxpayers.

Truss told the Commons: “I will make sure that in our energy plan we will help to support businesses and people with the immediate price crisis, as well as making sure there are long-term supplies available. I understand that people across our country are struggling with the cost of living and they are struggling with their energy bills.

“That is why I, as Prime Minister, will take immediate action to help people with the cost of their energy bills and I will be making an announcement to this House on that tomorrow and giving people certainty to make sure that they are able to get through this winter and be able to have the energy supplies and be able to afford it.”

In response to Labour leader Sir Keir Starmer, who has pushed for a levy on the £170bn of “excess profits” that oil and gas producers are projected to enjoy over the coming years, Truss rejected a windfall tax.

“I am against a windfall tax," she said. "I believe it is the wrong thing to be putting companies off investing in the United Kingdom just when we need to be growing the economy”.

Sir Keir said refusing to tax the profits made by oil and gas firms as a result of high global prices would leave taxpayers footing the cost of an energy prize freeze for decades.

“The Prime Minister knows she has no choice but to back an energy price freeze, but it won’t be cheap and the real choice, the political choice is who is going to pay,” he said.

“Is she really telling us that she is going to leave these vast excess profits on the table and make working people foot the bill for decades to come?”

Truss' clash with Sir Keir showed clear dividing lines on fiscal policy, with the new Prime Minister also determined to scrap planned increases in corporation tax for businesses.

Corporation tax had been scheduled to increase from 19 per cent to 25 per cent in 2023, but Truss said that this would deter investors and the UK cannot “tax its way to growth”.

Sir Keir accused Truss of protecting the profits of Shell and giving Amazon a tax break rather than helping families and public services.

“Families and public services need every penny they can get. How on earth does she think now is the right time to protect Shell’s profits and give Amazon a tax break?”, he said.

Truss replied: “I’m on the side of people who work hard and do the right thing. That is why we will reverse the national insurance increase and that is why we will keep corporation tax low, because ultimately we want investment right across our country, we want new jobs and new opportunities and that is what I will deliver as Prime Minister.”

Sir Keir said: “Not only is the Prime Minister refusing to extend the windfall tax, she’s also choosing to hand the water companies polluting our beaches a tax cut. She’s choosing to hand the banks a tax cut.

“Add it all together and companies that are already doing well are getting a £17bn tax cut while working people pay for the cost-of-living crisis, stroke victims wait an hour for an ambulance and criminals walk the streets with impunity.”

In a sign of the political battles to come, Sir Keir said: “There’s nothing new about the Tory fantasy of trickle-down economics, nothing new about this Tory Prime Minister who nodded through every decision that got us into this mess and now says how terrible it is, and can’t she see there’s nothing new about a Tory Prime Minister who when asked who pays says, ‘It’s you, the working people of Britain’?”

Truss replied: “I will take immediate action to make sure we have lower taxes and we grow the economy and that way I will ensure we have a positive future for our country and we get Britain moving.”

In her victory speech earlier this week - after winning the Tory leadership contest and thus becoming the de facto new Prime Minister to replace the disgraced Boris Johnson - Truss said she has a “bold plan” to cut taxes and grow the UK economy and promised to “deliver” when it comes to the energy crisis by not only dealing with bills but also addressing the long-term supply issues. This has been interpreted as meaning building more new nuclear power stations, as well as a sharp increase in new North Sea exploration and drilling for fossil fuels, despite the obvious climate issues and repercussions for the UK's net-zero targets.

On the same day as Truss was celebrating, a new centre-right political party launched in the UK, with the stated aims of significantly accelerating the decarbonisation of the UK and ejecting net zero-sceptic Conservative MPs from their constituencies at the next general election.

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