Liz Truss news latest: PM expected to freeze energy bills at £2,500 and scrap fracking ban

Long-term fixed-price contracts would “lock in” massive profits for electricity companies for years to come, Ed Miliband has said.

The shadow climate change secretary told BBC Radio 4’s Today programme: “This is a proposal from Energy UK, and let’s be clear about this proposal: This would lock in massive windfall profits for these electricity generators.

“Let me explain why: what Energy UK have said is we’ll accept slightly lower prices now, so we can have much higher prices over the following 15 years.

“This would be a terrible deal for the British people, a terrible deal for billpayers.

“It is much better – if there are these unexpected windfalls, and there are – the right thing to do, the fair thing to do, is not to do some dodgy deal with these companies, but to do a windfall tax.”

Long-term fixed-price contracts would “lock in” massive profits for electricity companies for years to come, Ed Miliband has said.

The shadow climate change secretary told BBC Radio 4’s Today programme: “This is a proposal from Energy UK, and let’s be clear about this proposal: This would lock in massive windfall profits for these electricity generators.

“Let me explain why: what Energy UK have said is we’ll accept slightly lower prices now, so we can have much higher prices over the following 15 years.

“This would be a terrible deal for the British people, a terrible deal for billpayers.

“It is much better – if there are these unexpected windfalls, and there are – the right thing to do, the fair thing to do, is not to do some dodgy deal with these companies, but to do a windfall tax.”

Levelling Up secretary Simon Clarke has indicated the government will lift the ban on fracking as part of its plan to control energy prices.

Speaking on Sky News, Mr Clarke denied the government was abandoning its net zero target.

“If we want energy sufficiency we have to look at every source including clearly new nuclear, more renewables but we also want to look at technologies like fracking,” he said.

“We have to do so in the most sensitive possible way with community consent at the absolute heart of our policies.

“The net zero commitment that the government has made by 2050 is critical. But in the near-term we need all kinds of gas as a transition fuel and that is something the Prime Minister will be saying more about.”

Levelling Up Secretary Simon Clarke has said the economy will suffer “enormous damage” if the government fails to control surging energy prices.

Ahead of Liz Truss’s announcement of details of her plan to limit price increases, the pound fell to its lowest level against the dollar since 1985 amid concerns about the scale of the borrowing required.

However, Mr Clarke told Sky News: “If we fail to act, if we don’t protect the economy against the shock of the size and scale we are talking about, then there is going to be enormous damage.

“In these circumstances I think the country will say and I think markets will respect that this is the most sensible thing to do.

“The government is clear that a fiscally responsible approach sits at the heart of our plans but we cannot fail to respond to the magnitude of the moment.”

Downing Street has hinted that the fracking ban could be lifted when Liz Truss sets out a new package to help deal with the energy crisis.

Russia’s invasion of Ukraine pushed energy prices and security to the top of the agenda, prompting calls for the Government to rethink the moratorium it had imposed on fracking in England in 2019 in the wake of tremors in Lancashire.

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Liz Truss has been accused of sending a “destructive message” to the EU by handing arch-Brexiteer Steve Baker a ministerial role in the Northern Ireland Office, writes Amy Gibbons.

The decision was branded “obnoxious” and a “red flag” by SDLP MP Claire Hanna, as she claimed Ms Truss appeared to be “continuing down the diplomatically ignorant route of her predecessor”.

Mr Baker, who organised the Brexiteer revolt that ultimately brought down Theresa May, has described the Northern Ireland Protocol as “a thorn in the side of relations between us and Ireland”.

The White House has warned Liz Truss that UK-US trade talks could be in jeapardy if her government undermines post-Brexit arrangements for Northern Ireland.

“There is a no formal linkage on trade talks between the US and the UK and the Northern Ireland protocol, as we have said, but efforts to undo the Northern Ireland protocol would not create a conducive environment,” White House press secretary Karine Jean-Pierre said.

On Tuesday, the White House said Joe Biden and Ms Truss “discussed their shared commitment to protecting the gains of the Belfast/Good Friday Agreement and the importance of reaching a negotiated agreement with the European Union on the Northern Ireland protocol.”

The two leaders could meet as soon as the UN General Assembly later in September.

Mr Biden, who often speaks with pride of his Irish roots, has insisted Britain should do nothing that could endanger a quarter-century of peace in Northern Ireland.

Liam James has more here:

The national newspaper front pages are dominated by the new prime minister’s plan to tackle soaring energy prices and the challenges she faces ahead.

The Independent‘s front page reports the pound reaching historic lows on Liz Truss’s first day in No10.

The Guardian, The Telegraph and the Daily Mirror report that a freeze on energy bills until 2024 is set to be the basis of Ms Truss’s plans to tackle soaring energy prices.

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The NHS will face “extreme pressure” in the coming months without intervention from the new government, health leaders have warned.

In a letter to the prime minister, experts from across the sector called for “urgent action” to address the “considerable” pressure already felt by frontline services.

They said that the prime minister has inherited “an NHS in the most challenging state it has been in for decades” and public satisfaction with the service is “at the lowest point in 25 years”.

Health leaders have predicted that the coming winter will be the “busiest on record” for the service.

Deputy first minister John Swinney has warned Liz Truss’s tax cuts proposed during the Tory leadership election could have a negative effect on the Scottish budget.

Mr Swinney told BBC Scotland’s The Nine on Wednesday evening he did not think the UK government led by Ms Truss “believed in public services”.

The comments came after he announced that £500 million in cuts would have to be made to the Scottish government’s budget on Wednesday.

“What I take from the direction of travel of the new prime minister’s government is this is going to be a government that does not really invest in public services and does not believe in public services,” he said.

“That presents some very real dangers to the public finances of Scotland.

“Essentially if the prime minister changes the balance between the amount of tax raised and the amount of public spending, and goes down the route of reducing public spending, there is a risk that public spending in Scotland could fall as a consequence because of the way in which the block grant is calculated by changes to public expenditure in England.”