LIZ Truss has promised that typical households will pay no more than £2,500 a year for their energy bills for the next two years. 

In new measures announced today, the Prime Minister told MPs the proposals would shield households from further price rises in the global energy market sparked by the war in Ukraine.

She also promised support for businesses for six months, with targeted help for the most vulnerable industries after that initial period.

The Prime Minister also confirmed that households who do not pay for gas or electricity from the mains will receive support from a fund, and will be no worse off.

The plan will see the government limit the price suppliers can charge customers for units of gas.

Ministers will pay the difference between what households pay and what energy suppliers would charge if the scheme were not in place.

Ms Truss refused to say today what the cost of the plan would be, but estimates have suggested it could be between £100bn and £150bn.

The Prime Minister ruled out funding the measure through a windfall tax, saying it would "undermine the national interest". 

Labour leader Sir Keir Starmer said that meant the bill would be "picked up by working people."

Under the current domestic energy cap, households face average bills of £1,971 but this was set to rise to £3,549 in October.

The £2,500 “energy price guarantee” will apply in England, Scotland and Wales from October 1, with the same level of support made available to Northern Ireland, which has a separate energy market.

The guarantee is based on the existing cap, plus the £400 universal discount announced earlier this year.

Ms Truss said the government would "defray the cost of this intervention" by "ramping up supply.”

The Prime Minister said the government would accelerate "all sources of domestic energy including North Sea oil and gas production."

She told MPs: "We will be launching a new licencing round which we expect to lead to over 100 new licences being awarded."

Ms Truss also confirmed that England's ban on fracking will end.

She said the production of domestic shale gas could begin in as little as six months.

The Prime Minister said she wanted to make the UK a net energy exporter by 2040.

Ms Truss told the Commons: “We will speed up our deployment of all clean and renewable technologies including hydrogen, solar, carbon capture and storage and wind where we are already a world leader in offshore generation.

“Renewable and nuclear generators will move on to Contracts for Difference to end the situation where electricity prices are set by the marginal price of gas.

“This will mean that generators are receiving a fair price, reflecting their cost of production, further bringing down the cost of this intervention.”

The Prime Minister also claimed the intervention would curb inflation "by up to five percentage points, bringing a reduction in the cost of servicing Government debt."

Ms Truss told MPs: “This is part of my vision for rebuilding our economy – secure energy supply is vital to growth and prosperity, yet it has been ignored for too long.

“I will end the UK’s short-termist approach to energy security and supply once and for all.

“That is what I promised on the steps of Downing Street, today we’re acting decisively on that pledge.

“This will help us build a stronger, more resilient and more secure United Kingdom."

Sir Keir pointed to leaked Treasury estimates that energy producers could make £170bn in unexpected windfall profits over the next two years.

He told MPs: “The head of BP has called this crisis a cash machine for his company, and households are on the other end of that cash machine, their bills funding these eye-watering profits.”

The Labour leader rubbished the Prime Minister's claims that a windfall tax will deter investment.

"That’s ridiculous," he said. "These vast profits are not the reward of careful planning. They are the unexpected windfall from Putin’s barbarity in Ukraine. There is no reason why taxing them would affect investment in the future.”

He quoted the boss of BP as saying a windfall tax would not impact on investments it would make, with Sir Keir saying: “The Prime Minister’s only argument against the windfall tax falls apart at first inspection.

“Laying bare that she is simply driven by dogma, and it’s working people that will pay for that dogma.”

Sir Keir told the Commons: “Ask voters whether they think that it is fair that they pick up the bill, or those companies that make profits they didn’t expect to make, and there is only one answer to that question.

“It is a very simply question of whose side are you on?”

He added: “I am afraid this isn’t a one-off because not only is the Prime Minister refusing to extend the windfall tax, she is also choosing to cut corporation tax. An extra £17bn in tax cuts for companies that are already doing well.

“That means handing a tax cut to the water companies polluting our beaches, handing tax cuts to the banks, hand a tax cut to Amazon. She is making that choice even though households and public services need every penny they can get.”

The SNP's Westminster leader, Ian Blackford said the plan would fall far short of what was required: "At the start of the year, we were faced with an energy crisis. By the summer it was an emergency.

"Right now, today, we're at the precipice of a humanitarian disaster because it's no longer a question of whether to heat or eat, when many households can no longer afford to do either."

He said: "The sheer scale of those soaring energy bills meant that there was never any question that households and businesses couldn't be able to pay the cost of energy bills.

"They were and they are unaffordable. If these prices weren't frozen, the bills simply couldn't have been paid.

"So freezing prices wasn't really a choice. It's the only political option.

"And when the current price cap stands at £2000 with a 54% increase in spring, and many people already unable to pay, setting the cap at £2,500 isn't an actual freeze."