Kwasi Kwarteng says the government was never going to let households face soaring energy bills caused by Putin’s war in Ukraine.
The chancellor says there will be three key steps. The energy price guarantee, equivalent support for businesses and an energy markets financing scheme delivered by the Bank of England.
Aubrey Allegretti, political correspondent: Kwarteng starts by pinning the blame for inflation and spiralling energy bills directly on Russia’s president, Vladimir Putin.
After the criticism the Conservatives faced over the summer for months of inaction while the leadership contest dragged on, the chancellor tries to counter that narrative by claiming the new PM acted with “great speed”.
“People need to know help is coming, and help is indeed coming,” is intended as a rallying cry of reassurance – however he tempers that expectation by reminding people energy markets are “volatile”.
Growth and public finances
Kwarteng says the government will expand the supply side of the economy through tax cuts to target economic growth of 2.5% per year.
The chancellor says he will turn a “vicious cycle of stagnation into a virtuous circle of growth,” although cautions that “none of this is going to happen overnight”.
Kwarteng says the government will publish costings of the measures. He also commits to the Office for Budget Responsibility will publish a full economic and fiscal forecast before the end of the year.
The government’s energy support scheme is expected to cost £60bn for the six months from October.
Aubrey Allegretti: Kwarteng seeks to turn the last 12 years of Conservative economic wisdom on itself and present the government as new and radical – rather than hanging on the coattails of the last one.
He lays out his central point that “growth is not as high as it should be”, arguing this only leads to lower money to fund public services, relying on higher taxes, and so on and so on.
“We need a new approach for a new era,” should be seen as nothing less than a bid to reinvent the Conservatives and present them as a party of change – to avoid being blamed for the mistakes of the past. (Despite, of course, Truss having served in the previous three Conservative governments.)