Almost a decade ago, Conservatives thought that Labour’s proposed energy price freeze was part of the “Marxist universe” the party inhabited. Now the prime minister, Liz Truss, finds herself there. Labour and the Tories see eye-to-eye on the need for intervention in energy markets because of a dizzying surge in domestic energy bills. Not since the 1970s have politicians put themselves centre-stage in energy markets.
Freezing the average annual household energy bill at £2,500 from October is a good policy, but it is not good enough to prevent 6.7m homes finding themselves in fuel poverty. The answer would be to increase benefits, but Ms Truss is adverse to “handouts”. That said, her policy leaves bills £1,000 lower than what the regulator predicted. Businesses will get similar-sized help. The package is expected to reduce inflation by up to 5%.
