Easy News: Prime Minister Liz Truss announces Energy Price Guarantee plan to combat rising electricity and gas bills

1. 

   On 6 September 2022 Liz Truss became the new Prime Minister of the United Kingdom. She took over from Boris Johnson and beat Rishi Sunak, who also wanted to lead the country.

2. 

   One of the first things Liz Truss has told people she will do as Prime Minister is help people with the rising costs of gas and electricity.

3. 

   She has announced the Energy Price Guarantee which will last for two years, starting from 1 October 2022. The Energy Price Guarantee means there is a limit on the price companies can charge people for each unit of energy they use.

4. 

   Experts said energy prices could go up by 80 per cent in October. Even with the Energy Price Guarantee, they will still increase by 27 per cent. This means the average household energy bill will rise from £1,971 per year to £2,500 per year.

5. 

   The Energy Price Guarantee does not mean energy bills cannot go higher than £2,500. The cost will depend on how much energy people use. If people use more electricity and gas than the average household, they will pay more than £2,500 per year.

6. 

   The rising cost of energy is pushing many people into ‘fuel poverty’. This is when gas and electricity costs are so high that some people have to choose between heating their home in the colder months and having enough money to buy food.

7. 

   The Government says it is trying to find more ways to help people. They have agreed to give all households £400 off their energy bill over six months, by taking money off their monthly payments from October 2022 to March 2023.

8. 

   People living in homes in council tax bands A-D should have already got a £150 council tax rebate. Council tax bands A-D are homes that were worth up to £88,000 on 1 April 1991. A council tax rebate is a refund.

9. 

   Older people aged over 65 can get a Winter Fuel Payment of up to £600.

10. 

    People with disabilities can get a Disability Cost of Living Payment of £150.

11. 

    This payment should be made in September 2022 to people receiving some disability benefits, including Disability Living Allowance, Personal Independence Payment and Child/Adult Disability Payment (in Scotland).

12. 

    Many people think the Government’s plans do not do enough to help the poorest people, who will still find it hard to pay their energy bills.

13. 

    The Labour Party, Liberal Democrats and Scottish National Party believe that the energy companies should be made to reduce energy costs, as they have made billions of pounds in profit in 2022. Profit is the money companies have left over after paying costs such as tax and wages.

14. 

    They are not happy that the Government is borrowing more money to pay for the energy cost help it has announced. Borrowing money increases Britain’s national debt. Debt is money the country will have to pay back over future years.

15. 

    Borrowing so much can result in higher inflation. Inflation measures how much the prices of things go up by each year. Inflation is already at at 12.3 percent, the highest level it has been since 1982.

16. 

    Interest rates may also go up. Interest rates are costs that people are charged when they borrow money or extra money paid to you when you have money in savings. Higher interest rates make it harder for people to borrow money. It also means it takes longer to pay borrowed money back.

17. 

    This is very worrying for people who have mortgages, which are loans used to buy houses and other buildings. If people can’t afford to pay the higher interest rate, they could have to sell their homes.

18. 

    Lots of people are very worried about their energy bills and confused about what support they could get.

19. 

    The disability charity Scope will give free energy and water advice to people with disabilities. You can find their website here.

20. 

    A charity called Community Integrated Care is running a campaign called “Taking Charge”. This aims to help people who work in social care, and the people they support, to lower the cost of their energy bills. You can see their website here.

21. 

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