The UKs program to freeze energy prices to help households shoulder the burden of rising costs will be scrapped at the end of this winter. Photographer: Tolga Akmen/AFP/Getty Images It would be “irresponsible” for the government to continue exposing the public finances to unlimited volatility in international gas prices, Chancellor Jeremy Hunt said in a statement to broadcasters on Monday. The Treasury will carry out a review into a replacement program.
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— Bloomberg UK (@BloombergUK) October 17, 2022
The energy price freeze -- at £2,500 -- was a landmark policy for Prime Minister Liz Truss. It was supposed to run for two years, keeping prices stable for households amid the worst cost-of-living crisis for decades. The policy was expected to need about £130 billion, but could require more if wholesale gas prices increase with the government on the hook for the extra costs.
“I’m announcing today a Treasury-led review into how we support energy bills beyond April next year,” Hunt said. “The objective is to design a new approach that will cost the taxpayer significantly less than planned, whilst ensuring enough support for those in need.”