Boris Johnson waded into the Tory leadership row over energy costs, saying he was “absolutely certain” his successor would offer extra help to households as annual bills were forecast to exceed £4,200 by January.
Johnson made an unexpected intervention on the energy bills at Reception No 10 as Liz Truss, the front-runner to be next prime minister, was accused by Rishi Sunak’s campaign of being “divorced from reality” over her refusal to commit to more handouts.
The prime minister has repeatedly refused to take action on skyrocketing gas and electricity bills before leaving office on September 5, but said he was sure the next prime minister “will want to make a few more announcements in September/ October about what we will do do more to help people in the next period in December/January”.
He added: “I just want you to know that I am absolutely confident that we will have the fiscal firepower and the freedom to continue to take care of people as we have.”
The deepening row over how to help households came on the day annual energy bills were forecast to hit £4,200 from January, prompting a warning that Britons face “serious hardship on a massive scale” without government intervention .
At the same time, government sources acknowledged that officials had modeled the possibility of a four-day power shortage in the first quarter of next year, potentially forcing permanent power outages for industry and households. A business department source said it was extremely unlikely to happen, but did not deny the work was done based on a “reasonable worst-case scenario”.
Johnson’s comments add further pressure on Truss to admit that as prime minister she will need to give more help to households than just tax cuts.
As Truss doubled down on her existing plan to reverse the rise in National Insurance and scrap the £150 green levy, a spokesman for Sunak’s campaign said her proposals “will not hit the sides of most British families this winter and pensioners will not get no help”.
Consultancy Cornwall Insight said on Tuesday it expected the energy price cap to reach £4,266 a year in the first three months of next year – more than three times the previous year and more than double the current level.
The consultancy predicts that bills could then rise to £4,426 in April before falling. Just a week ago, Cornwall Insight predicted that the energy price cap was set to rise to £3,615 a year from January.
A possible winter energy shortage, caused by less gas and electricity from Norway and the rest of Europe, could push prices even higher.
But Truss, the runaway favorite to succeed Johnson, said over the weekend that he did not want to give “handouts” to people struggling with bills, preferring to prioritize tax cuts. She repeatedly refused to promise any further help for energy bills on Tuesday, only confirming plans to reverse the recent rise in National Insurance and temporarily suspend green charges on energy bills.
Sunak warned on Tuesday night that the British people “will not forgive us” if vulnerable households do not receive additional direct help this winter.
Speaking at Conservative clashes in Darlington, which were dominated by questions about bills, Sunak said Truss’ plans would not help a section of the population and said any prime minister should not rule out direct support. Truss said he would focus on tax cuts instead of committing to additional direct assistance on energy bills.
“If you’re a pensioner, if you’re on the ‘national living wage’, the tax cut costs zero,” the former chancellor said. “This is not a policy to help people get through the winter and I think it is wrong to cut off aid directly because we as a Conservative government have a duty to help those who are most vulnerable.
“If we don’t do this, not only will people suffer, but we will be completely crushed when it comes to the next election.” The British people will not forgive us for not doing so.
Truss stressed that she believes the best way to help with the cost of living is to cut taxes, starting with National Insurance. “I didn’t agree with the increase in national insurance. We promised not to in our manifesto and we need to help people who are struggling with the cost of living.
“We must be on the side of the self-employed. We need to be on the side of people who work and do the right thing, and we need to empower people to keep more of their own money. These are conservative principles.
Critics of her policy warn that the tax cuts disproportionately help the better off and offer no help to pensioners or those out of work, while environmental levies contribute only around £150 a year to the average bill.
“What is vitally important at the moment is to drive economic growth,” Truss told reporters during a visit to Huddersfield in West Yorkshire.
“Right now we have the highest taxes in 70 years. That’s why I believe in lower taxes to stimulate growth, encourage businesses to invest and thus put more money in people’s pockets.”
Asked if she ruled out any other help for energy bills, Truss said: “What I promise is that from day one, people will have lower taxes. They will also have lower energy bills because I will put a temporary moratorium on the green energy charge. But what we need is a growing economy.
Meanwhile, Sunak confirmed in an interview with ITV that he would likely offer “several hundred” pounds of rebates on energy bills once the increase is confirmed. “That’s the scale I used to do,” he said.
As a former chancellor, Sunak announced a £15 billion support package for consumers in May, including £400 for every household. However, rising wholesale prices since then threaten to wipe out the impact of that support.
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On Monday, the Lib Dems called for an “energy holiday scheme” in which the government funds the full cost of any increase in the energy price cap in October.
While Labor said it would provide extra help to households, funded by ending tax breaks for energy firms, one backbencher argued it needed to go much further.
In an article for the Guardian, Zara Sultana said that since Boris Johnson accepted Labour’s idea of a windfall tax on energy firms in May, her party was “not offering enough” to people struggling with bills. The Coventry South MP has set up a campaign called ‘Enough is enough’ to seek more action on the cost of living.
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