Liz Truss unveils freeze on energy bills from October
The new PM insists NI homes will benefit from the plans.
Last updated 8th Sep 2022
New Prime Minister Liz Truss says she will limit energy bills at £2,500 a year for an average household over the next two years.
It's part of a package of measures set out in Parliament by Ms Truss to ease the cost-of-living crunch.
How will Northern Ireland homes benefit?
Ms Truss insisted that it would be applicable to Northern Ireland, saying: “This policy will apply in Northern Ireland, and those benefits will be open to the people of Northern Ireland, as part of the United Kingdom.”
However, difficulties in delivering the £400 per household energy discount previously announced, have raised questions about whether or not this cap can kick in on the 1st of October, which will be the case for homes in England, Scotland and Wales.
The picture is potentially complicated further by the absence of functioning devolved executive in Northern Ireland.
The DUP has blocked the formation of an executive in protest at Brexit's Northern Ireland Protocol. Some ministers remain in post in shadow format but they are limited in the decisions they can take.
Mr Murphy, who remains finance minister, claimed Ms Truss's speech at Westminster lacked detail on how support would be delivered in Northern Ireland.
He also said the package unveiled by the Government did not go far enough.
"While the British Government has said the energy policy changes will apply here, they have failed to outline what exactly that means," he said.
"This will bring little comfort to individuals who are having to decide between heating and eating. Likewise, businesses trying to plan ahead for the winter months have no certainty as to when support will be forthcoming.
"The absence of a functioning Executive will require a workaround. At a time of crisis for citizens, businesses and public services, this is completely unacceptable. I am calling for urgent clarity on how energy support will be delivered locally."
The Sinn Fein minister added: "While the support announced today is to be welcomed, it does not go far enough to support the most vulnerable in society or small businesses. Nor is it likely to meet increased energy costs faced by schools, hospitals and other public-sector bodies.
"Six months does not provide enough certainty for businesses who are facing spiralling and crippling energy costs. Businesses don't have the luxury of waiting for the outcome of reviews to determine if their business is deemed to be a vulnerable sector entitled to further support.
"Benefits should be uplifted in line with inflation to support low-income households with the increased costs they will face this winter, there should be an uplift in Universal Credit and the reduced VAT rate for the hospitality sector should be reinstated. These measures must be included in the upcoming fiscal statement later this month."
Mr Murphy said it was "incomprehensible" that the Government was not imposing more taxes on the energy companies.
"Instead of imposing further taxes on energy companies, the Westminster government is increasing borrowing in order to sustain the profits of energy companies," he said.
"It is our citizens who will in the longer-term foot the bill for these interventions."
DUP MP Sammy Wilson welcomed Ms Truss's announcement, insisting that Northern Ireland householders would not miss out.
"The size of the package announced demonstrates for anyone in doubt, that our place within the United Kingdom delivers benefits that simply could not be replicated were our nation to be torn apart," he said.
"The scale of action also highlights that it is only Westminster which has the capacity to make a meaningful difference in the face of the crisis all households are facing.
"I was glad the Prime Minister was able to very clearly state that all parts of the United Kingdom, and specifically Northern Ireland would benefit. This is a problem which we are all facing together and it is right that measures to help must be delivered equally.
"The Prime Minister also rightly recognised that the crisis not only requires short-term intervention and assistance, but also action to secure the long-term energy supply needs of the United Kingdom and to ensure we can become an exporter of energy in the future.
"Whilst we welcome this decisive action, it is disappointing that none of the funding that will be necessary will come from the energy companies who are set to make significant additional profits, driven largely due to Russia's invasion of Ukraine.
"We have previously called on the Chancellor and the Government to look to a windfall tax on energy companies and believe this would have been a suitable way for such UK-wide assistance to have been funded."
What if your home is heated by oil?
Two thirds of homes here use oil, and there will be a separate fund for that.
She went on: "For those using heating oil, living in park homes, or those on heat networks, we will set up a fund so that all UK consumers can benefit from equivalent support."
Ms Truss said the new measures will save the typical household £1,000 a year.
Government to borrow billions of pounds
The plan will see the Government limit the price suppliers can charge customers for units of gas, replacing the existing price cap set by regulator Ofgem.
Using tens of billions of extra borrowing, the Government will provide energy suppliers with the difference between the new, lower price and what they would charge were this not in place.
The Prime Minister told MPs: "This is the moment to be bold. We are facing a global energy crisis and there are no cost-free options."
No new windfall tax
Labour leader Sir Keir Starmer attacked the Government's plan for funding the package announced by Liz Truss which "does not come cheap".
Responding in the Commons Sir Keir said the refusal to fund it with a windfall tax showed she was "driven by dogma" and "it's working people who will pay for that".
Fracking ban lifted
As expected, Ms Truss also ended England's ban on fracking - the controversial process of extracting shale gas by fracturing rocks with high-pressure water.
This could see domestic shale gas production begin in as little as six months, but will face heavy criticism from opponents who have long warned that fracking can cause earthquakes, water contamination, noise and traffic pollution.
She told MPs that fracking would only go ahead in areas where there was local support for it.
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