Liz Truss energy plans: What has Martin Lewis said about the energy crisis plan of action set out by Prime Minister Liz Truss?

The former foreign secretary has set out her plans for handling the energy crisis in a speech held on Thursday, September 8, which began at 11.30am.

During her first speech as Prime Minister on September 7, Liz Truss announced that she will make the UK an ‘aspiration nation’ after ‘riding out the storm’ of the winter energy crisis.

Liz Truss took over from Boris Johnson as the UK’s Prime Minister on Tuesday, September 6, after meeting Queen Elizabeth II at Balmoral.

A top priority of the new PM will be to deal with the energy crisis by capping bills for an average household, resulting in household bills of no more than £2,500 a year from October 1 2022.

She has also ensured that businesses struggling with their bills will get support for six months, with extra support for vulnerable companies as well.

The government plans to help fund those using heating oil, living in park homes or those on heat networks to make sure that every consumer in the UK can benefit from equal support, PA reports via Liz Truss.

Martin Lewis has posted a series of tweets explaining what her new plans mean ‘in practice’ for consumers to help break it down for the public.

He tweeted: “New energy price guarantee - 15 quick need to knows for CONSUMERS. Please feel free to share…”

Here are the easy-to-digest points outlined by Martin Lewis.

1 - “The new price guarantee starts 1 Oct, and for someone on typical use will be £2,500/yr and it will last two years.”

2 - “The current price cap is £1,971/yr rate at typical use and was due to rise to £3,549 (and likely £5,400 in January). It was £1,277/yr last winter.”

3 - “This will be a cap on standing charges and unit rates, so use less you pay less, use more you pay more (I’ll publish the rates when I have them). There is not total cap on what you pay, the typical rate is just a figure for illustration.”

4 - “The new lower price cap includes getting rid of the green levies.”

5 - “The £400 payment to all homes (paid as £66 a month over winter) will continue.”

6 - “That will take the average payment to £2,100/yr.”

7 - “To estimate what you’ll pay, over a year, multiply current costs by 6.5% (each £100 becomes 106.50) this includes the £400 discount (but not other payments).”

8 - “For those with lower than typical bills, the % increase will be lower, for higher users (as the £400 payment is flat regardless of use, so has a bigger proportionate reduction on lower usage).”

9 - “The £650 payments to those on many benefits will continue (half’s already been paid).”

10 - “As will the £150 to those with disabilities and £300 to pensioners.”

11 - “There’s no announcement on whether these payments will be in place next winter, I suspect the political reality is at least for benefits recipients, similar will be paid next year.”

12 - “VAT is not being reduced in this announcement, but there is a chance (50-50 I’d say) that may happen in the Chancellor’s fiscal statement next week.”

13 - “For those on LPG and heating oil I’m told there will be discretionary payments to help them too (awaiting details).”

14 - “For those in park homes and who pay landlords directly, I’m told they should benefit from the new business help (awaiting details).”

15 - “Those on fixes, can either stay on them, or can leave and switch to the new state subsidised tariffs with no exit penalties.”

The money expert tweeted at 12.24pm: “I’m being told there will be legislation so similar [to the above] will apply in Northern Ireland.”

Martin has posted on Twitter a short clip digesting all the information he has so far about the Prime Minister’s energy plans - including what it means for people on fixed tariffs.

“The current plan was for somebody on typical use in October it was going to rise 80% to £3,549 a year and then in January the prediction was it was going to go up another 50% to £5,400 a year. So a freeze at two and a half grand is substantially cheaper than what you would have paid.

“However, if instead of looking at what you would have paid, contrast it to what the rates were last winter then the price cap for somebody on typical use was £1,277 a year. So this is substantially more than people were paying last winter.

“One of the big questions I’ve had here is ‘I’m fixed. What happens if I’m fixed? Would I be lobbing on that both publicly and behind the scenes?’ I got a direct answer on it this morning from the secretary of state for business and I’ve written it down so it’s accurate: Those on fixed can either stay on them or (assuming it’s more expensive) they can leave and switch to the new subsidised tariffs with no early exit penalties. That’s if you’re switching to your own existing companies. Standard variable tariff: You will not be charged early exit penalties if you are leaving a fixed.

“Next question: What about those other payments that were promised? The £650 for people who are on benefits, certain benefits anyway, £150 for disabilities, £300 for pensioners. All of those were announced in May. All of those will continue this year. There is no announcement on those or the £400 payment for next year. So if the £400 payment isn’t given then £2,500 will be the real price for next year for someone on typical use.

He added: “Sorry for having to do it on typical use, it’s the only details I’ve got. When I’ve got more info on the standing charge and unit charge I’ll do it that way.

“So arguably we could see prices effectively rising next year if no £400 is given. I suspect though, for people on benefits, it would be politically very difficult for them not to give that £650 payment again next year (and pensions and disabilities too) because if they don’t, it’s just criminally unaffordable for those on universal credits and on other legacy benefits.

“VAT is not being reduced in this announcement, but I think there is a chance that may happen - at 50/50 I’d say - in the chancellor’s fiscal statement next week.

“Next one, delighted to hear I’ve given evidence on this many times, it’s disgraceful that LPG and heating oil for those in rural areas is not regulated. Well I am being told there will be discretionary payment to help people who have their heating provided that way too and awaiting details.

“And finally for those in park homes or those who pay their landlords directly or those in controlled heating environments where the bills are all in one are being told that the help there will be provided through the business help that is being given over the next six months.”

At 2.27pm on September 8, Martin tweeted: “IMPORTANT FIXED TARIFF INFO: I’m hearing fixed tariffs will have the same unit rate reduction as variable tariffs (ie roughly 30% off). So it looks like, unless you are fixed at over the new Oct price cap level, your fix will be cheaper than moving to variable. More to check on this.”

He also added in the thread: “Just to clarify this is the same per pound reduction not the saem percent reduction.”