Centrica and Octopus back plan to freeze UK energy bills for two years
Two of the UK’s biggest energy suppliers have thrown their weight behind a plan being debated in the industry to devise a fund that could freeze customer bills for two years.
The British Gas owner Centrica and Octopus Energy are understood to support a scheme that would create a multibillion-pound facility to spread the cost of an emergency funding package over a decade, the Guardian can reveal.
Their fellow suppliers ScottishPower and Eon have presented plans to ministers for the “tariff deficit fund” underpinned by a government guarantee.
Under the proposals, first reported by the Sunday Times, commercial banks would put cash into the state-backed fund, which suppliers could then draw on to fund measures to freeze customers’ default-tariff bills at the current price cap, £1,971, for two years.
The cost of the scheme would then be paid back over 10 to 15 years through a surcharge on bills or via taxation.
It is understood the Centrica chief executive, Chris O’Shea, voiced support for the idea at a meeting between ministers and energy bosses on Thursday last week.
Sources said several solutions to raise funds to tackle bills were presented by companies to Boris Johnson, as well as the chancellor, Nadhim Zahawi, and the business secretary, Kwasi Kwarteng, at the meeting.
They were to either double the existing package announced by the former chancellor Rishi Sunak, which will cut £400 from the bills of every household, or to use the government or private sector funds to freeze the price cap, with the creation of the deficit scheme part of that option.
The Octopus chief executive, Greg Jackson, told the Guardian “urgent action” was needed and the tariff deficit fund was among the options the government should consider taking.
He
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