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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". |
But he said he would ensure there was enough support for those most in need. | |
The government stepped in last month to protect consumers from soaring energy bills after Russia invaded Ukraine. | |
But Mr Hunt said it would be "irresponsible for the government to continue exposing the public finances to unlimited volatility in international gas prices". | |
"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. | |
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. | |
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. | |
What Jeremy Hunt's statement means for you | |
Two thirds of tax cuts from mini-budget reversed | |
Pound rises as chancellor moves to calm markets | |
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". |