Energy crisis: Kwasi vows more than £500 support for £2,800 price cap with more ‘in days’

Kwasi Kwarteng disrupted by activists over windfall tax

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Industry regulator Ofgem announced today that the energy price cap (the maximum annual tariff) could soar to a staggering £2,800 in October, up from £1,971. This could push the number of people in fuel poverty to 12 million, double what it is now, according to Ofgem boss Jonathan Brearley. And amid a crippling cost-of-living crisis as inflation is ripping through the nation too, the public is desperate for extra Government help.

According to Mr Kwarteng, the Government’s Warm Homes Discount and council tax rebates have already set the foundations.

The Business Secretary told the Business, Energy and Industrial Strategy Committee that it was up to Chancellor Rishi Sunak to ease the pain of consumers and help to alleviate bills.

When asked what measures he would like to see from Chancellor, Mr Kwarteng responded: “A lot of things we want to see he has already done. If you look at the £9.1billion that he gave in February, that was significant.

“That then comprised the £150 off council tax bills between bands A and D, a £200 pounds up-front payment to help with bills.”

Mr Kwarteng was referring here to the council tax rebate which around 20 million households could apply for.

It is part of a £9.1billion government support package, which from October, will also see £200 slashed off electricity bills.

And that is not the only measure the Chancellor has introduced that Mr Kwarteng believes will soften the blow of the alarming price cap rise.

He said: “The Warm Homes Discount was extended from two million people to three million.

“And the amount they had been given was £140 and is being uplifted so there is some measure of support.”

This is a one-off discount on electricity bills for the winter.

But the Committee was not convinced that these measures alone were sufficient, pointing out that only three million homes will get a discount when 12 million homes are expected to get pushed into fuel poverty.

Mr Kwarteng responded: “What we see now is not the full picture.

It is part of a £9.1billion government support package, which from October, will also see £200 slashed off electricity bills.

And that is not the only measure the Chancellor has introduced that Mr Kwarteng believes will soften the blow of the alarming price cap rise.

He said: “The Warm Homes Discount was extended from two million people to three million.

“And the amount they had been given was £140 and is being uplifted (to £150) so there is some measure of support.”

This is a one-off discount on electricity bills for the winter.

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But the Committee was not convinced that these measures alone were sufficient, pointing out that only three million homes will get a discount when 12 million homes are expected to get pushed into fuel poverty.

Mr Kwarteng responded: “What we see now is not the full picture.

“Both the Prime Minister and the Chancellor have said there is more to do and we have to just wait and see what is forthcoming.”

He later added: “We are absolutely committed to make sure that the most vulnerable are protected this winter.”

And according to Torsten Bell, Chief Executive of economics think tank Resolution Foundation, the Government could be poised to announce new measures in the coming days.

He tweeted: “Very odd for Ofgem to be formally signalling this (the price cap rise) now.

“Means one thing: government announcement on extra help is coming in days.”

He went on: “Why is more Fovernment support imminent? Because rise in energy price cap to £2,800 means 9.6 million families in England would be in fuel stress this winter – spending more than 10 percent of their budgets on energy.

“That’s totally untenable.”

“The scale of a new package is going to need to be large – well over £10billion.

“And no – given people keep asking – the amount raised from a windfall tax doesn’t need to perfectly match up to how much gets spent on support

Labour has urged to slap down a windfall tax on energy companies.

Energy giants like Shell and BP have seen their profits soar while millions have been forced to fork out more cash to pay off their spiralling bills.

A tax on these profits could then be used to go towards paying for discounts for customers with spiralling energy bills as the cost-of-living crisis continues to unfold.

But the Government had appeared to hold back on this, arguing it would discourage investment into key oil and gas projects in the North Sea this year.

One of Mr Johnson’s advisors has even reportedly claimied it is an “ideologically unconservative thing to do”.

Now, the Government has said it is “looking at” introducing this.
But Mr Kwarteng came under fire more fire from the Committee for taking “so long” to do so.

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