Yahoo Finance Sunak 'prepared to act' on energy bills but only in October
UK households should not expect any more help from the Treasury to help pay rising energy bills until October, the chancellor has suggested.
Rishi Sunak told the Treasury Committee that he is “prepared to act” if energy prices continue to spiral out of control but that the government needs to know what the situation will be when the energy cap changes again in October to make a decision.
“Clearly it's very difficult to sit here today and speculate on what happens to energy prices, therefore the biggest impact on living standards in the autumn. Let's wait until we get there and then can decide on the most appropriate course of action, but I don't think anyone today knows what that appropriate course of action ought to be,” he said.
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Sunak is under pressure to ramp up support for UK households as bills for gas and electricity will increase by £700 a year next week to around £2000 and could rise by a further £1,000 by October.
The Sunday Times reported the chancellor could offer a cash giveaway later this year in the form of another council tax rebate, after announcing a £150 rebate in January, in the wake of new polling showing the cost of living crisis is the biggest issue for voters.
Sunak in January announced a £150 council tax rebate for all households and a £200 discount on energy bills — to be paid back over the next five years — for the majority of households.
He added that there are mechanisms in place to make sure people using pre-payment metres will be able to get the energy bill rebate and refused to describe the repayment as a loan.
“Describing it as a loan is wrong,” Sunak said, adding that “it is a means of spreading the cost of this year’s increase”.
The chancellor was widely criticised for not doing enough to help the country's lowest-income households.
However, he said that said the £26bn headroom built into his tax and spending plans could easily be wiped out by weaker-than-expected growth or higher interest rates.
Labour MP Angela Eagle said the chancellor has made a “political choice to plunge 1.3 million people into absolute poverty”.
Sunak disagreed and said that he is “very mindful” of people on low incomes and “difficult circumstances”.
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MPs were previously told by the Office for Budget Responsibility (OBR) that the poorest in society are less likely to enjoy the benefits announced in the spring statement last week because the support packages focused so heavily on those in work, according to the government’s own economists.
Officials from the OBR also told MPs that the Retail Price Index (RPI) of inflation — which influences train tickets, broadband bills and mobile phone tariffs — could soar above 10%.
They also said the price of fuel could rise 6% next year once the 5p-a-litre cut in fuel duty comes to an end next year.
