PRIME Minister Liz Truss has today announced a massive £150 billion subsidy that will cap the average household energy bill at £2,500.

From 1 October, the Ofgem price cap, which was due to be £3,549 for the average UK household, will instead be replaced by a ‘two-year energy price guarantee’ of £2,500 – or just over £200 a month.

Businesses will get support, with bills capped for six months, a shorter period of protection than many had hoped for.

Making the announcement in the House of Commons, Ms Truss said the move to spend £150 billion would  "curb inflation and boost growth".

Reacting to the news, Conservative MP for Montgomeryshire, Craig Williams, said: “ The last few years have brought unprecedented challenges for us all, with the current cost of living challenges being felt across the world.

“Having spoken to many residents and businesses over the last few months who are rightly extremely concerned about rising costs, I am sure these measures will come as a great relief to my constituents. The new cap will save a typical household £1,000 a year on their energy bills. Businesses, charities and public sector organisations will receive equivalent support for six months, where it will then be reviewed every three months.

“Given the rural geography of Montgomeryshire, I have also been lobbying for support to be given to properties powered by heating oil. I am therefore very pleased that a new Government fund will be created for residents who do not use mains energy, allowing them to access the equivalent support. This will also apply to residents in mobile home parks and those who have communal heating schemes.”

The Older People’s Commissioner for Wales, Heléna Herklots CBE, felt however the scheme did not go far enough.

She said: “The action announced by the UK Government today simply does not go far enough to protect many older people from the devastating impact of the cost-of-living crisis.

“The £2,500 cap being introduced represents a doubling of energy costs compared to this time last year, meaning that older people throughout Wales will still be faced with bills they are unable to pay.

“Older people have told me they are already cutting back on essentials in an effort to save money and as we head into the winter months this will result in more ill-health due to cold, damp housing and/or poor nutrition. Sadly, in some cases, this will lead to deaths that could have been prevented.

“The Prime Minister must therefore deliver further targeted action to provide older people with the financial support they need to get through this winter.

“In addition, the UK Government must deliver longer-term change to ensure that older people’s incomes are sufficient for a decent standard of living. This includes a commitment to maintaining the Triple Lock mechanism on the State Pension and reviewing and permanently upgrading the Winter Fuel Payment in recognition of the fact its real-terms value has decreased significantly since it was last set.

“Alongside this, the Pension Credit system also needs to be overhauled so that older people who are eligible receive the money they are entitled to automatically. This would provide additional financial support to around 70,000 older people in Wales who currently miss out – worth over £200 million.

“The new Prime Minister has missed an opportunity to deliver crucial, potentially life-saving, support that many older people are desperate for, and the price that will be paid – by individuals and society as a whole – due to these decisions is unacceptable.”