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Energy bill help to be scaled back from April, says Jeremy Hunt Energy bill help to be scaled back from April, says Jeremy Hunt
(about 1 hour later)
A scheme to cap all household energy bills for two years will be cut from April as the government looks to save money, the new chancellor has said.A scheme to cap all household energy bills for two years will be cut from April as the government looks to save money, the new chancellor has said.
Jeremy Hunt said the support - which limited a typical household bill to £2,500 - would be reviewed so it cost "significantly less than planned".Jeremy Hunt said the support - which limited a typical household bill to £2,500 - would be reviewed so it cost "significantly less than planned".
There was concern the help, announced last month, was not targeted to support the most vulnerable people. But he said he would ensure there was enough support for those most in need.
The surprise move comes as bills have soared since Russia invaded Ukraine. The government stepped in last month to protect consumers from soaring energy bills after Russia invaded Ukraine.
But Mr Hunt said that it would be" irresponsible for the government to continue exposing the public finances to unlimited volatility in international gas prices". But Mr Hunt said it would be "irresponsible for the government to continue exposing the public finances to unlimited volatility in international gas prices".
Under the Energy Price Guarantee, Ms Truss's government had capped all household energy bills for two year from 1 October in a bid to prevent millions from facing hardship this winter. "The objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need," he said.
The energy price cap - the highest amount suppliers are allowed to charge households for every unit of energy they use - had been due to rise to £3,549 for a typical household from October. Under the Energy Price Guarantee, Ms Truss's government had capped all household energy bills for two years from 1 October in a bid to prevent millions facing hardship this winter.
Help for business will also be reviewed, but Mr Hunt said he would ensure there was "enough support for those in need". Before this guarantee was introduced, the energy price cap - the highest amount suppliers are allowed to charge households for every unit of energy they use - had been due to rise to £3,549 for a typical household from October.
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The decision to scale it back from April sparked concern among consumer groups who warned households would be plunged into uncertainty.
"Everyone knows why decisions have been made at breakneck speed, but there are questions that need to be answered, and answered quickly," said National Energy Action boss Adam Scorer.
"Who will still get support? Will it include vulnerable households not on welfare benefits? Will that support be deeper for those in greatest need?"
Consumer rights campaigner Martin Lewis said that while the support for intervention had been desperately needed, a "universal energy price guarantee was always expensive and poorly targeted".
But he added: "The post-April support will still need to reach a decent way up the net and support middle earners, energy rates are still huge."
Ms Truss's support plan - thought to cost up to £150bn - was to be funded through government borrowing after the prime minister rejected calls to extend a windfall tax on oil and gas firms.
However, former Chancellor Kwasi Kwarteng followed it with plans to cut taxes by some £45bn.
Concerns about rising borrowing sparked turmoil on financial markets which spilled over into the mortgage market, where interest rates on loans have surged to 14-year highs.
On Monday, Mr Hunt promised to review the energy support while also reversing £32bn worth of the planned tax cuts. The new chancellor said he was doing "what is necessary for economic stability".