Chancellor Kwasi Kwarteng has confirmed household energy bills will be frozen at £2,500 this winter.
Millions of households are at risk over the common months amid skyrocketing costs.
Mr Kwarteng told the Commons: ‘People will have seen the horrors of Putin’s illegal invasion of Ukraine.
‘They will have heard reports that their already-expensive energy bills could reach as high as £6,500 next year. Mr Speaker, we were never going to let this happen.
‘People need to know that help is coming. And help is indeed coming.’
Existing plans to give each household extra cash to cope with rising energy bills will also remain in place.
Mr Kwarteng added: ‘For the next two years, the typical annual household bill will be £2,500. For a typical household, that is a saving of at least £1,000 a year, based on current prices.
‘We are continuing our existing plans to give all households £400 off bills this winter.
‘So taken together, we are cutting everyone’s energy bills by an expected £1,400 this year.’
But charities and campaign groups have already joined opposition parties in calls for further support.
The Child Poverty Action Group said the mini budget focused ‘more about bankers’ bonuses than helping hungry kids’, adding that the Government now ‘risks a collision with reality’.
Imran Hussain, director of policy and campaigns at Action for Children, said Liz Truss and her Cabinet need to ‘think again’.
He said: ‘If the new Chancellor has money to spend on tax cuts for those who are relatively better off then he has the money to spend throwing a lifeline to low-income families, who are desperately struggling with the cost-of-living crisis. Many now face a bleak Christmas.
‘Whilst the energy price guarantee will help offset the near apocalyptic rises that had been predicted, it doesn’t address the mounting pressures families face with food, fuel, housing and other costs that continue to climb.’
In the House of Commons this morning, the Chancellor’s pledge was described as a ‘menu without prices’ by Labour shadow chancellor Rachel Reeves.
‘What has the Chancellor got to hide?’, she demanded.
The SNP’s Alison Thewliss then described Liz Truss’ team as a ‘Thatcher-playing cosplay shambles of a government’.
In this morning’s speech, Mr Kwarteng also announced a cap on bonuses in the finance industry.
The cap, introduced by the European Union in the wake of the 2008 financial crash, curbs bankers’ annual payouts to twice their salary.
The end of the measure was confirmed as part of Mr Kwarteng’s so-called mini-budget aimed at bouncing back from the cost of living crisis through ‘growth-focused’ policies.
Under new Government proposals, huge areas of England could be bolstered against the economic crisis with new ‘low-tax zones’.
Talks will be held with dozens of local authorities to set up the dedicated areas.
Potential investment zones include the likes of Blackpool, Cornwall, Hull, Leicestershire and Stoke-on-Trent.
The government has announced it will cut stamp duty, raising the possibility of house prices being pushed even higher in the short term.
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