Liz Truss is tipped to be named Britain’s next Prime Minister today, and top of her in-tray will be the rocketing energy bills crisis.
Household gas and electricity bills are rising from about £1,300 to £3,500 a year between winter 2021 and winter 2022.
She will make an announcement this week as allies say she is looking at support on the scale of the Covid furlough scheme - which cost £70billion.
Yet the small-state right-winger has repeatedly refused to say what she will announce, attacked “handouts” and warned: “Not all of those decisions will be popular.”
No final decisions have been made - and insiders say they will not be until after she is confirmed as Prime Minister, with an announcement at 12.30pm today.
But a Truss ally told the Mirror: ”I’m confident she appreciates the scale of the tsunami. I think it will be akin to what we did during Covid.”
Here are eight of the leading options for Liz Truss to tackle energy bills - and our hostage-to-fortune ratings of how likely each one looks out of 10.
Cutting National Insurance
The likely PM has pledged to reverse April’s National Insurance rise, which took the tax from 12% to 13.25% for earnings over £12,570 a year.
Yet the richest tenth of people will gain 235 times more than the poorest - £1,802 compared to £7.66 a year, the IFS think tank said.
This means it will do little to help low-wage workers with their bills - and nothing for the unwaged at all.
Ms Truss has claimed it is “fair” that her tax cut will help the rich so much more than the poor.
In a hardline Thatcherite stance she said: “To look at everything through the lens of redistribution I believe is wrong”.
Likelihood: 10/10
Scrapping green levies on bills
Ms Truss has vowed to temporarily freeze the green levy - a charge added to energy bills to help fund investments in renewables.
Describing it as a "temporary moratorium", she said it would enable businesses "to thrive while looking at the best way of delivering net zero".
But Paul Johnson, the director of the Institute for Fiscal Studies think-tank, has described the policy as "somewhere between meaningless and pointless”.
He said it only saves households around £11 over the next three months.
Martin Lewis, the founder of Money Saving Expert, who has campaigned for major government action on energy bills, also said removing it would be a "sticking plaster on a gaping wound".
10/10
Freezing prices
Allies say Liz Truss is “considering” a freeze on at least some Brits’ energy bills this winter - but the details are not nailed down.
One told the Mirror it was unlikely to be “as crude” as Labour ’s £29bn six-month total freeze on all bills. That plan involves halting bills for everyone at their current £1,971 - and bailing out energy firms to fund the difference.
But Ms Truss has not ruled out an alternative plan drawn up by Scottish Power - where prices would be frozen for two years using loans.
The crucial difference here is customers would pay back the £100billion cost out of future bills for decades.
Likely Chancellor Kwasi Kwarteng fuelled speculation of this by saying “fiscal loosening” - more borrowing - will be needed.
Other options are some kind of targeted freeze to those who need it - or capping wholesale energy prices, with the government funding the difference.
Truss-backing economist Gerard Lyons told The Sun: “It’s simple, it’s effective, it helps businesses and individuals - and means the risk and cost is taken off and placed on the Government - who have the opportunity to borrow very cheaply in the market.”
8/10
Help for businesses
Desperate small businesses are not covered by the price cap and are suffering unimaginable rises to sums over £20,000 for their energy bills.
Any support package would surely need to help them. While the shape of this is not confirmed, an ally of Ms Truss told the Mirror businesses would be helped too.
8/10
Cutting VAT on energy bills
Ms Truss's rival Rishi Sunak, who had criticised the policy of temporarily cutting VAT on energy bills, made a U-turn and backed the measure as he came under pressure to outline help.
According to the IFS, removing the 5% VAT on household bills would save the average consumer over £150 - far below the huge increase in the energy price cap.
Given Ms Truss is yet to set out specific proposals, it is not clear whether she will back the approach, but cutting taxes has been the centrepiece of her campaign for the leadership.
There have also been reports the leadership favourite is examining the possibility of reducing overall VAT from 20% to either 15% or 10% to relieve some pressure on households.
7/10
Cash payments to vulnerable people
People on Universal Credit are already getting £650 in payments, while pensioners get £300 and disabled people get £150 this winter.
It’s thought Treasury officials drew up options to extend these payments as part of a range of possibilities for the new Prime Minister.
These are also the payments Rishi Sunak said he would increase if he won the Tory leadership race.
Liz Truss has not been clear on whether this will be her way to support people. She’s attacked cash “handouts” but also said she’ll help the vulnerable.
5/1
Payment or discount to everyone
All electricity bill payers in Britain are set to get a £400 discount off bills between October and March - and 80% of households in England got £150 off council tax in April.
But Liz Truss has strongly suggested more of this won’t be the answer for her.
She has said: “What I don’t support is taking money off people in tax and then giving it back to them in handouts. That to me is Gordon Brown economics.”
1/10
Nationalising the energy firms
Unions and the Green Party have called for energy companies to be brought into public ownership amid spiralling bills and bailouts exceeding £2 billion.
According to a recent poll by YouGov, almost half (47%) of those who voted for the Conservatives at the 2019 general election want to see the nationalisation of the energy industry.
Among Labour voters, the figure is even higher, with almost four in five backing nationalisation, but Keir Starmer last month rejected the policy - to the dismay of those on the left.
Reversing the privatisation of the energy sector is also perhaps the policy least likely to be embraced by the Tory leadership hopeful Ms Truss, who has often championed her values as a free marketer.
0/10
