UK energy crisis plan due this week, no funding details yet-Deputy PM

New British Health Secretary and Deputy Prime Minister Therese Coffey walks outside Number 10 Downing Street, in London, Britain September 6, 2022. REUTERS/Toby Melville

LONDON  -British Prime Minister Liz Truss will set out plans to tackle soaring energy bills this week, Deputy Prime Minister Therese Coffey said, but she declined to say who will foot the bill for what is set to be a costly intervention.

Truss, appointed prime minister on Tuesday, has vowed immediate action to address one of the most daunting sets of challenges for an incoming leader in post-war history including soaring energy bills, a looming recession and industrial strife.

She was due to chair a meeting of her new cabinet on Wednesday and then make her parliamentary debut as Conservative Party leader, going head to head with opposition Labor Party Leader Keir Starmer at 1100 GMT in the high-profile Prime Minister’s Questions (PMQs).

Asked by Sky News when the government’s plans on energy would be revealed, Coffey said: “I know that this week …there will be a further announcement and I’m sure that will assure people indeed, when they hear what is going to be offered.”

A source familiar with the situation told Reuters that Truss may announce on Thursday that she will freeze energy bills in a plan that could cost towards 100 billion pounds ($115.33 billion), surpassing the COVID-19 furlough scheme.

“People, including you, will just have to wait for the detail of that,” Coffey said when asked how the package would be paid for. She said some details were still being finalized.

Investors have expressed alarm at the scale of extra borrowing that the government will probably need to undertake to fund its support scheme and the tax cuts promised by Truss during her leadership campaign.

The pound sank to two-and-a-half-year lows against the U.S. dollar this month while long-dated British government debt fell on Tuesday by the most since the onset of the COVID-19 pandemic, adding to a recent slump.

Truss’s cabinet, which is packed with loyalists who supported her during the campaign to replace Boris Johnson, will meet for the first time around 0730 GMT.

Her PMQs appearance is likely to be scrutinized for how her style compares to that of her flamboyant predecessor Johnson, and how she responds to attacks by the opposition who have said the Conservative Party has failed to tackle the energy crisis.