Money Saving Expert Martin Lewis has warned what the new Prime Minister must do to help tackle soaring energy costs.
It is understood that Liz Truss is drafting plans to freeze the energy bill price to help struggling families pay their bills throughout the winter period. It comes after Ofgem announced the price cap is due to rise to £3,549 a year for average households from October; an 80 per cent increase from the start of this year which could increase the financial pressure that many families are seeing as a result of the cost of living crisis.
Reports have said Ms Truss will freeze the prices at £2,500 a year, with households still set to receive the £400 rebate from October. And ahead of her announcement on Thursday, Martin Lewis appeared on BBC's Radio 4 Today programme to discuss the potential plans.
Read more: Liz Truss set to announce ‘bold’ plan to tackle spiralling energy bills
Speaking about the rumoured energy prize freeze that may be announced later today, he said that he 'welcomed' the plans but that they are "not perfect". He added: "We need clarification on whether remaining payments on benefits, the payments for those on disabilities that were planned and announced in May are still going to come through.
"But I think we have to be fair here and as someone who has been begging and pleading that more help comes out, well this is more help. The great benefit of this policy is that it helps everyone - the great problem with this policy is that it helps everyone, it means wealthy people like me will also get our bills cut.
"But absolutely big picture I think we need to welcome that something is being done and that the political will is being changed so that people across the country are not going to face hikes of 120 per cent by January putting a typical bill up to £5,400 which is clearly unaffordable - not just for the most vulnerable, not just for those on low incomes but for many on middle incomes too."
Mr Lewis also described how Ms Truss must ensure the energy price cap extends beyond a year so that those who are most vulnerable to price hikes will still be able to afford their bills once the freeze ends.
He added: "What we can't do is have this in place for a year and then if things are still as bad next winter just let it go. Politically, whenever the time frame is set out today, the reality of it is that we are now setting a ballpark figure of what energy bills should be and they can't really rise that much above that."
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He continued: "The energy price cap for someone on typical use is currently £1,971, It'll go up to £2,500 is what the rumours are. I should say I have not spoken to anybody in government about this I hopefully have a briefing later this morning, so I'm reliant on those rumours too.
"So, the £2,500 rise will be cushioned this winter by the £400 promise payment of possibly the VAT cuts. Now what's important to remember about the £400 promise payment is that's a flat payment.
"The price cap, of course, depends on your usage - those with higher usage will pay a lot more than £2,500, those with lower usage a lot less. The £400 is flat and what that actually means subtly is those with lower usage will have a lower than average rise, those with higher usage a higher than average rise because of the flat £400.
"But next winter we may not have that £400 and we may not have the other payments so effectively you are allowing a subtle step up, even if the price freeze policy is in place next winter. If the remaining help is not put back there would be subtle step up next year and so you could almost argue there is a softening this year so that there isn't such a great rise this year and then it goes up again next year.
"I think this has to be in place for at least 18 months to two years to be able to give people the peace of mind that is needed. It is, of course, a very expensive way to do it, it is not at a targeted way to give help."
He added: "I still haven't seen anything that perfectly solves the problem cheaply and efficiently of how you help the most vulnerable but also recognise that many in the middle need substantial help to."
Meanwhile, Levelling Up Secretary Simon Clarke said the government's energy support package is designed to provide users with certainty. He told BBC Radio 4's Today Programme: "We are not looking here at sticking plaster solutions.
"We want a lasting settlement that provides both comfort and clarity for both households and businesses. This is a major attempt to draw a line and provide energy certainty for everybody in this country about energy usage in the medium term."
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