This would mean an extra £620 for the poorest households on top of the £650 grant already promised, and an extra £260 to cover the rise in energy costs for the typical family over the year, on top of the £400 that are already committed. Liz Truss, the front-runner in the Tory leadership race, has not ruled out further help for families despite focusing her economic package on direct tax cuts rather than direct payments. But its allies on Sunday dismissed Sir Keir’s plans as “sticky plaster”. “Grabbing a title is no substitute for a more consistent policy,” said an ally of the ministers. “Any freeze must end. Remember the freezes of the 1970s and prices soared immediately after they ended. By themselves, they are temporary adhesive patches that do not resolve the underlying infection.” Government sources have confirmed that Chancellor Nadhim Zahawi is working on plans to cut a further £400 from energy bills this winter which will be presented among the options for the incoming prime minister. He asked officials to work on a multi-billion pound package that would see the energy price cap reduced from January. It would change the way Ofcom determines the level at which the cap should be set by removing a cap on what suppliers can charge consumers. Instead, this cost will be met through funding facilitated by the Treasury and the Bank of England.
Sir Keir’s plans ‘would lead to higher taxes’
Greg Hunts, the energy minister and a supporter of Mr Sunak, said the former chancellor would be prepared to commit “big numbers” to help with the cost of living crisis, but warned Sir Keir’s plans would lead to higher taxes. Asked about the Treasury’s plans to cut £400 in energy bills, he told Times Radio: “Rishi, as you’ve seen during the pandemic, is not afraid to commit big numbers to support the economy and support people in difficult times. moments”. In an interview with the BBC, Mr Hunts said Mr Sunak would like to take “immediate, immediate action” to help people pay their energy bills this winter, but warned that the “magical solution » of Labor will have consequences. “We’re going to have to find a way to compensate the people who have effectively tried to remove this price hike and that would inevitably lead to higher taxes,” he said. Sir Keir’s intervention will increase pressure on Ms Truss and Mr Sunak to spell out what they would do to help families struggling with soaring bills if they become prime minister. To pay for the measures, Labor said it would close a “loophole” in the levy on energy company profits announced by Mr Sunak in May and roll back the start in January, which will bring in £8bn. Labor said £14bn would come from scrapping the £400 energy rebate and abandoning pledges by Mrs Truss to end the “green levy” on fuel bills or scrap VAT on fuel bills promised by Mr Sunak . And by keeping inflation at nine per cent instead of the projected 13 per cent, it would reduce interest payments on the government’s debt by another £7bn.
