Conservative leadership race: ‘No time to lose’ to help millions of families, incoming Prime Minister told

Britain’s incoming Prime Minister was told on Monday that there is “no time to lose” to help millions of families and firms set to be hit with sky-rocketing energy bills.

As the wholesale price of gas soared on Monday morning, London leaders appealed for a major new support package amid “rising panic” over looming “colossal rises” in energy bills.

They warned that the number of people in the city facing “impossible decisions” about having to choose between eating or heating this winter was increasing to “frightening levels”.

Millions of households face their energy bill jumping in October from £1,971 to £3,549, the price cap level, and then spiralling possibly even higher in the winter.

Many firms, particularly small and medium-sized, which are not protected by the domestic energy cap, are also facing stratospheric hikes in bills which are threatening to force some of them out of business.

“After a summer of delay, we need an autumn of action to help the UK avoid a winter of discontent,” warned John Dickie, chief executive at BusinessLDN, previously London First.

“The Prime Minister can lose no time in moving to ease the cost-of-living crisis,” he added ahead of the midday announcement of whether Foreign Secretary Liz Truss, or ex-Chancellor Rishi Sunak, had won the Tory leadership contest and was set to become Britain’s 56th Prime Minister on Tuesday.

Former Cabinet Secretary Lord O’Donnell stressed that both contenders would almost certainly have already been briefed by senior civil servants on options to deal with the energy crisis so they could act swiftly.

He suggested this was clear from their initial proposals, which he believes were “not up to the size of the job”, being “revised quite substantially”.

If they had not, it would have been “disastrous” and left “a lot of very poor people in dire circumstances”.

On the European markets, the wholesale price of gas, which has soared after Vladimir Putin’s invasion of Ukraine, jumped by 30 per cent on Monday morning after Russia further cut gas supplies to the Continent by keeping the Nord Stream I pipeline closed.

Amid expectations that Ms Truss would be named Tory leader, and PM, Business Secretary Kwasi Kwarteng, who was tipped to be her Chancellor, sought to reassure the City that her Government would not embark on a reckless borrowing spree.

He stressed in the Financial Times that a Truss government would be “bold” and take “decisive action” with a package, within a week, to support household and firms amid reports that she was considering some form of energy cap freeze which could cost tens of billions of pounds.

The energy industry has been pushing for a £100 billion scheme, involving Government-backed loans, which would see the energy cap frozen for around three years and the debt then paid back by keeping household bills higher than gas prices over the rest of a decade or so.

Mr Kwarteng said that given the “severity of the crisis” that “some fiscal loosening” would be needed but this would be done in a “fiscally responsible way”.

Speaking to Times Radio, former Chancellor Philip Hammond warned that “if you try and confront the laws of economics, you will come unstuck”.

As the economic gloom grows, many families and firms are seeking to make savings on their energy use, food and other spending with inflation already over ten per cent.

Nick Bowes, chief executive at the Centre for London think tank, stressed: “With summer turning into autumn, there is rising panic among Londoners and the city’s businesses that they’ll be overwhelmed by the colossal rises in energy bills coming in the next few months.

“As soon as the new Prime Minister steps through the door of No10, their only priority must be an immediate package of support and reassurance that calms the growing panic.”

Manny Hothi, chief executive of the anti-poverty and inequality charity Trust for London, said: “The new Prime Minister should be in no doubt of the need for an immediate, substantial package of support for households to survive this crisis.

“The number of people unable to afford to eat and stay warm this winter has increased to frightening levels. As ever, the poor will be hardest hit.”

Cllr Georgia Gould, chair of London Councils, emphasised: “The combination of unaffordable energy bills and high inflation will see more and more people forced into impossible decisions about eating and heating their homes.”

Peter Smith, director of policy and advocacy at fuel poverty charity National Energy Action, added: “The energy crisis is not just increasing people’s daily cost of living; it is having a desperate impact on physical and mental health.”

Sir Keir Starmer, visiting Friern Barnet school in north London, said: “People need urgent help to tackle rising energy bills, which is why Labour would freeze energy bills this winter, saving households £1,000.”