Chancellor Rishi Sunak is preparing to announce a major new support package this summer for UK households struggling with rising energy bills as it seeks to prevent criticism that it is not doing enough to tackle the cost crisis for life.
Sunak’s colleagues said he wanted to make the announcement in August, around the same time as regulator Ofgem announced a new ceiling on energy prices in the UK, which could rise to an average of £ 2,900 a year per household.
The revised price cap will take effect in October, but Sunak is under tremendous pressure to announce what he intends to do to reassure households that state aid will be available when energy bills rise.
Boris Johnson said on Tuesday that he and Sunak would talk more about how they would use their “ingenuity and compassion” to tackle the problem and outline more “in the coming days”.
Ministers later clarified that this does not mean there will be an immediate emergency budget, but Sunak is now considering making a statement in the summer.
“Once we have a good sense of where the price cap will go, we will come up with what we can do to help people,” said one of Sunak’s allies. “The regulator will say what the increase will be in August.
Sunak is also “leaving the door open” to part-finance a contingency package through a contingency tax on the UK’s energy sector, according to his allies, unless oil companies offer new investment plans soon.
The chancellor was shocked by comments from Bernard Looney, BP’s chief executive, that an unforeseen tax would not affect his company’s investment plans.
“If their own CEOs say they don’t mind, it makes our lives very easy,” said one of the chancellor’s allies, adding that Sunak’s preference is to see companies invest more rather than tax more. .
Recommended
The final date and details of the support package have not been determined, but Sunak used cuts to municipal tax bills in February to help families struggling with significantly higher electricity and gas bills since April, when it was last increased the upper limit of energy prices.
A one-time refund of £ 200 for energy bills was also included in the £ 9bn package in February, along with a £ 150 discount for taxpayers in England’s A to D municipal bands. Sunak said 80% of households would receive £ 350 in support.
Analysts and electricity suppliers expect the cap on energy prices to rise to an average of between 2,600 and 2,900 British pounds a year per household in October, given that wholesale markets remain volatile following Russia’s invasion of Ukraine.
Ofgem CEO Jonathan Brierley prepared households for further growth, saying at a conference on Wednesday that “the market remains highly volatile and as a result we expect further price increases later this year.”
The price cap is currently averaging £ 1,971 per household per year, after rising 54% in April.
Sunak, criticized for his alleged inadequate response to the cost of living crisis in his spring statement, is under pressure to come up with a better package this summer.
Johnson is also working on a package of “non-fiscal” measures to help households. The ideas include eliminating customs duties on some imported foods.
Add Comment