Isle of Man to freeze electricity prices until next year

The Isle of Man is set to freeze energy prices until March to shield residents and businesses from crippling bills this winter.

The island’s independent government will cap electricity bills as part of a “comprehensive package” expected to cost up to £26m.

It means residents there are likely to have some of the lowest electricity prices in the British Isles.

By contrast, for households across the UK, experts have warned that the latest energy price cap rise will plunge people into poverty and debt.

British consumers will find out on Friday what the latest cap will be, with analysts expecting average annual bills to increase to at least £3,500 from October, then to £4,650 from January.

A 54 per cent rise in April had already added around £693 a year to the average bill, which now stands at £1,971 – itself a record.

The 85,000 citizens of the Isle of Man had been preparing for a 70 per cent rise in tariffs, taking average household bills to around £1,236 a year.

But under a deal struck between the government of the crown dependency and electricity provider Manx Utilities, increases in energy costs will instead be added to customers’ bills over 20 years, but funded by a government loan.

UK armed forces minister James Heappey has played down the idea of a similar freeze by the UK government.

Alex Allinson, the Isle of Man’s treasury minister, said: “The aim here is to flatten the curve on the cost-of-living increases and give households a degree of certainty and time to adjust to what may be a longer-term set of challenges.

“Providing a loan with a 20-year repayment means that the costs of record electricity prices expected this winter can be factored into bills over a much longer period, cushioning consumers from what would be, for many, crippling price rises.

“It is a considerable sum which will help people and businesses to meet rising costs and means this money can circulate in our economy, boosting both consumer and business confidence.”

Other measures announced include capping bus fares at £2 for at least three months and improving home energy efficiency.

Labour has called for an energy bill freeze in the UK.

Rishi Sunak, before he quit as chancellor, announced a package of support worth £15bn to help the UK through the crisis.

It includes a one-off payment of £650 for 8 million families on benefits, £150 council tax rebates for homes in bands A to D and a £400 discount on bills.