LIZ TRUSS has rejected calls to fund her billion-pound bill freeze by taxing the profits of energy companies

In her first appearance in the Commons since her appointment as Prime Minister, the new Tory leader confirmed that details of the scheme would be unveiled in Parliament tomorrow. 

It is thought that the government will shield households from eyewatering hikes in bills by introducing an artificial cap of around £2,500 for around 18 months. 

Ministers will then borrow around £100bn to pay energy firms the difference between the artificial cap and the cost price.

READ MORE: Truss energy bill freeze 'poorly targeted' but 'inevitable' warns think tank

However, both Labour leader, Sir Keir Starmer, and the SNP’s Ian Blackford said that would ultimately pass the cost of the scheme on to taxpayers. 

Ms Truss told MPs: “I will make sure that in our energy plan we will help to support businesses and people with the immediate price crisis, as well as making sure there are long-term supplies available.

“I understand that people across our country are struggling with the cost of living and they are struggling with their energy bills.

“That is why I, as Prime Minister, will take immediate action to help people with the cost of their energy bills and I will be making an announcement to this House on that tomorrow and giving people certainty to make sure that they are able to get through this winter and be able to have the energy supplies and be able to afford it.”

Sir Keir pointed to Treasury analysis which predicts oil and gas producers could soon see £170 billion of “excess profits” over the next two years. 

“The Prime Minister knows she has no choice but to back an energy price freeze, but it won’t be cheap and the real choice, the political choice is who is going to pay,” he said.

“Is she really telling us that she is going to leave this vast excess profits on the table and make working people foot the bill for decades to come?”

The Prime Minister said a windfall tax would put companies off investing in the UK "just when we need to be growing the economy."

Sir Keir said Ms Truss's plans to stop a hike in corporation tax from 19% to 25% in 2023, meant the Prime Minister was "choosing to hand the water companies polluting our beaches a tax cut. She’s choosing to hand the banks a tax cut.

“Add it all together and companies that are already doing well are getting a £17 billion tax cut while working people pay for the cost-of-living crisis, stroke victims wait an hour for an ambulance and criminals walk the streets with impunity.”

He added: “There’s nothing new about the Tory fantasy of trickle-down economics, nothing new about this Tory Prime Minister who nodded through every decision that got us into this mess and now says how terrible it is, and can’t she see there’s nothing new about a Tory Prime Minister who when asked who pays says ‘it’s you, the working people of Britain’?”

Ms Truss told him: “There’s nothing new about a Labour leader who is calling for more tax rises.

"It’s the same old, same old tax and spend. What I’m about is about reducing taxes, getting our economy growing, getting investment, getting new jobs for people right across the country.

“I’m afraid the right honourable gentleman doesn’t understand aspiration, he doesn’t understand opportunity, he doesn’t understand that people want to keep more of their own money and that is what I will deliver as Prime Minister.

“I will take immediate action to help people with their energy bills but also secure a long-term energy supply. I will take immediate action to make sure we have lower taxes and we grow the economy, and that way I will ensure we have a positive future for our country and we get Britain moving.”

In his question to the new Prime Minister, Mr Blackford urged her to rule out what he labelled "a Truss tax on household and businesses”. 

He said: “Instead of targeting the profits of massive corporations with a windfall tax, the Prime Minister's plan appears to be a decade-long raid on the bank accounts of ordinary taxpayers.

“These costs must not be passed onto consumers and businesses by deferring bills.

"Government must announce an enhanced windfall profits tax, making sure that those oil and gas producers pay their fair share from excess profits.

“Does the Prime Minister understand that her first act as Prime Minister will now define her? A Truss tax, that household and businesses will be paying for years to come.”

Ms Truss said: “Well I’m not quite sure what the right honourable gentleman’s position is, because on one hand he doesn’t seem to want oil and gas extraction from the North Sea, and on the other hand he wants them to pay more taxes. Why doesn’t he make up his mind?”

When he asked, again, she replied: “No it won’t be paid for by a windfall tax. I don’t believe we can tax our way to growth. And what I want to see, is I want to see us using more of our UK energy supply, including more oil and gas from the North Sea, and nuclear, and nuclear power in Scotland as well. And I hope I can count on the SNP’s support for that.”