Liz Truss sets out plan to shield households and firms from soaring energy prices

For businesses and other non-domestic users such as schools and hospitals, which have not been covered by the existing price cap, a six-month scheme will offer equivalent support.

After that there will be ongoing support for the most vulnerable industries, with a review in three months’ time to decide where the help should be targeted.

The plan will see the Government limit the price suppliers can charge customers for units of gas, replacing the existing price cap set by regulator Ofgem.

Using tens of billions of extra borrowing, the Government will provide energy suppliers with the difference between the new, lower price and what they would charge were this not in place.

Under the current domestic energy cap, households face average bills of £1,971 but this was set to rise to £3,549 in October – and forecasts have suggested it could hit as high as £7,700 by April 2023.

The £2,500 “energy price guarantee” will apply in England, Scotland and Wales from October 1, with the same level of support made available to Northern Ireland, which has a separate energy market.

The guarantee is based on the existing cap, plus the already promised £400 energy bills discount for all households, meaning costs will be similar to those faced today.

As expected, Ms Truss also ended England’s ban on fracking – the process of extracting shale gas by fracturing rocks with high-pressure water.

This could see domestic shale gas production begin in as little as six months, but will face heavy criticism from opponents who have long warned that fracking can cause earthquakes, water contamination, noise and traffic pollution.

She told MPs that fracking would only go ahead in areas where there was local support for it.