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Jeremy Hunt rejects Martin Lewis plea to stop 20% energy bill rise

Jeremy Hunt rejects plea from Martin Lewis to stop energy bills soaring by 20% in April saying government does not have ‘headroom’ to boost support – despite warning 1.7MILLION Brits face hardship

  • Martin Lewis joined calls for Jeremy Hunt to stop energy bills rising to £3,000
  • Chancellor warned government does not have ‘headroom’ for huge new support 
  • When are energy bills going up – and by how much? We explain  

Jeremy Hunt today rejected a plea from Martin Lewis to stop energy bills soaring by 20 per cent in April.

The Chancellor insisted the government does not have ‘headroom’ to boost support after the Money Saving Expert called for the cap to be held at £2,500 for typical households. 

In a letter to Mr Hunt yesterday, Lewis warned 1.7million more people could be pulled into hardship if he goes ahead with the rise to £3,000.

He said delaying the increase in the energy price guarantee would be both ‘practical and fair’, and help people survive until bills begin to come down later in the year.

On a visit to a London London science facility this morning, Mr Hunt told broadcaster that ‘we constantly keep the help we can give families under review’.

But he added: ‘If you’re saying ‘do I think we’re going to have the headroom to make a major new initiative to help people?’, I don’t think the situation would have changed very significantly from the autumn statement, which was just three months ago.’

Martin Lewis said 1.7million more people could be pulled into hardship if Jeremy Hunt does not freeze prices in the spring

Mr Hunt insisted the government does not have ‘headroom’ to boost support after the Money Saving Expert called for the cap to be held at £2,500 for typical households

He added: ‘We know just how tough it is for many people dealing with these huge spikes in their energy bills.

‘And that’s why we’re giving about £3,500 for the average family this year and last to help with those pressures, absolutely unprecedented support.

‘We always look at what else we can do, but we also have to be responsible with public finances.’

He said: ‘At the same time as energy prices have come down, so too have our receipts from the windfall taxes. So we have to look at everything in the context of what is responsible for public finances, because if we don’t, we’ll just see interest rates go up and then everyone who has a mortgage up and down the country will face a different kind of cost.’

The letter from Lewis said: ‘This cannot wait until the Budget – in practice, energy firms will need to know much sooner if the planned rise isn’t happening on 1 April, or they are bound to have to communicate to customers that it is coming.’

He said that the decision to increase prices was made at a time when wholesale rates were looking to be far higher than they are now, and that the underlying price cap currently looked as though it could be cheaper later this year than even the current EPG rate of £2,500 a year for a typical household.

This gave the Government ‘significant headroom’ to enable a postponement, while maintaining a lower EPG would also help reduce inflation, he said.

‘Postponing the increase is a practical and fair decision, with household energy bills already double what they were the prior winter.

‘Crucially, the damage to people’s pockets and mental health of another round of energy price rise letters is disproportionate.’

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, has warned that energy customers are facing a ‘cliff edge’ because other support schemes come to an end in March, meaning bills will go up between 19 per cent and 43 per cent depending on how the EPG is set from April.

He said: ‘Keeping the EPG at current levels is the very least the Government can do to help people manage through the ongoing energy bills crisis.

‘The Government has said that it will target more support at vulnerable groups from April, but again this does not equate to the same level of help people have had this winter. And that help has proven to be insufficient with millions spending this winter struggling in cold damp homes.

‘As people have run up huge levels of energy debt, the Government will also come under increasing pressure to help households with debt relief – especially in light of the obscene levels of profits energy firms have been declaring.’

The charity National Energy Action (NEA) predicts that the number of fuel-poor households will rise from 6.7million to 8.4million from April – approaching double the 4.5million households in this position in October 2021.

Emma Pinchbeck, the chief executive of Energy UK, which represents suppliers, has told MPs that the industry too wanted to see the Energy Price Guarantee fixed to £2,500 for the rest of the year.

‘There’s an underspend on that programme against what was budgeted because gas prices have fallen,’ she said.

‘We’re also calling, like the consumer groups, for some kind of targeted support in addition to that, so we’re very up for conversations about things like social tariffs.

‘And we’ve written to the Chancellor to call for the long-term picture on bills to be sorted by investing in green infrastructure but also in energy efficiency and doing some things on VAT to make things easier.’

A mild winter and falling wholesale gas prices are expected to ease the strain on households later in the year.

Energy consultancy Cornwall Insight predicts the average bill will be around £2,360 over the summer. 

That is much lower than anticipated last November, with experts fearing at the time that this summer would see bills climb to an average of £3,500 a year.

However, the energy price cap is still due to rise to £3,000 in April and consumers are expected to see a spike at that point. 

Cornwall said it expected gas prices to fall by 26 per cent between the spring and summer while electricity prices will fall by 32 per cent. 

By winter this year, average electricity and gas bills should be around £1,184 and £1,205 respectively, according to the energy consultancy. 

The drop follows months of falling wholesale gas prices due to mild weather and European countries cutting their dependence on Russian imports. It will lead to an £11.3billion saving for the Treasury, fuelling calls for Chancellor Jeremy Hunt to cut taxes in next month’s Budget.

When Mr Hunt set out his tax plans in November, wholesale gas prices were still significantly higher than normal. 

It meant the Government’s energy price guarantee – which capped average household bills at £2,500, rising to £3,000 in April – would cost £12.8billion. 

But wholesale gas prices have fallen more than 70 per cent from their August peak, meaning the scheme will now cost only £1.5billion.

The Office for Budget Responsibility (OBR) is expected to have lost around £12billion in revenue from the windfall tax imposed on energy providers, which is £7billion lower than predicted. 


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