A plan that could see energy bills being frozen or lowered is set to be announced on Thursday, it is being reported. The BBC says the 'deficit reduction scheme' is expected to form the centre piece of the government's attempt to tackle soaring energy costs for households this winter.
Small business are also expected to be offered some relief from the scheme that would see energy suppliers being able to take out government-backed loans to help subsidise or freeze bills. The loans would have to be repaid over 10 to 20 years.
Last week, the energy industry united behind its proposal for the scheme to freeze prices at current levels by plugging the gap between wholesale costs and what consumers pay.
Read more: What the big energy companies will do for people when they can't pay their bills
The new Prime Minister Liz Truss is under pressure to quickly come up with help for millions of households across the UK and during her victory speech she promised to "deliver on the energy crisis". You can follow live updates as Boris Johnson stands down here.
Energy UK, the industry body for companies that sell electricity and gas to homes and small businesses, proposed during a meeting with her predecessor Boris Johnson that commercial banks put money into a state-backed fund. Retail suppliers could then draw on this fund to freeze customer bills at £1,971 – the current price cap – for two years.
Without such intervention, some energy bills are set to double. For customers in Wales, England and Scotland, energy regulator Ofgem will raise its price cap to £3,549 from 1 October (currently £1,971).
Energy bosses have insisted for some time "the only game in town" to help is a government-backed superfund from which they could borrow to subsidise bills. It would mean that the government would guarantee loads to the companies that would be used to freeze or at least lower bills. The loads would then be repaid from bills over the next 10 to 20 years.
Scottish Power said freezing all bills at the current price cap of £1,971 for two years would cost nearly £100bn.
But Labour deputy leader Angela Rayner has said it is "unfair" for working-class people to bear the brunt of any energy bill freeze that is brought in by Liz Truss's incoming government.
Ms Rayner told Good Morning Britain: "It sounds to me from the rumours and the briefings in the press that (Liz Truss) will bring in the energy freeze, which is what Labour has called for and that's a good thing.
"But to make working people pay for it when the gas and oil companies have made bumper profits would be completely unfair.
"Therefore, the windfall tax on these companies, who have made extra profit than what they were expecting, is the right thing to do.
"I think many of the public can see that it's a matter of fairness. People are struggling at the moment. These companies have made profit that they never expected to make and therefore that redistribution is really important as part of the package."
Lib Dem leader Sir Ed Davey called for a "genuine freeze" of energy bills, saying it is "not right" that families and pensioners should be paying back a loan.
He told BBC Breakfast on Tuesday: "What we're hearing from Downing Street, what you were referring to, isn't a freeze. It's a loan.
"What they're saying is that families and pensioners should be paying this back for years to come. That's just not right.
"We should be asking the oil and gas companies who are making tens of billions of pounds in profit they never expected to make because Putin invaded Ukraine, we should be asking them to pay some of that back so that we can afford to freeze people's bills without actually having the loan system that it's rumoured that Liz Truss wants."
Asked if that is what he is expecting Ms Truss to introduce as leader, he said: "We just don't know, and this is my whole point. She's had weeks to tell us during the leadership election for the Tory party. And she didn't spell it out.
"Liberal Democrats are really worried. We put forward our alternative, our constructive alternative, which would be a genuine freeze on people's bills paid for by a one-off tax on the oil and gas companies who are making these super profits. That seems a fair approach."
The BBC says that details of how businesses will be helped need to be finalised but the leader of one business group told them "it's clear they have crossed a mental Rubicon - they know that businesses need help to avoid lasting damage to the economy".
It comes as many businesses are struggling, one Welsh pub landlord who has worked in the hospitality industry for more than 40 years has warned huge increases in energy costs will force businesses to close and see people lose their livelihoods. Read what he had to say here.
It is understood that bigger companies may be offered bespoke tax breaks to help them through the period of high prices.
Alex Veitch of the British Chambers of Commerce said: "It is encouraging that the government is seriously considering the support it can give to businesses during these very difficult times.
"But it remains to be seen whether these plans will go far enough in offering the help that many firms so desperately need."
Craig Beaumont from the Federation of Small Businesses said: "This commitment looks very promising, and arguably the best reassurance that small businesses need that some form of help with bills will follow - not just for households.
"The scope and reach of the help is going to be absolutely crucial to save hundreds of thousands of small businesses this winter."
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