Boris Johnson was today urged to address the cost of living “emergency” and protect families from rising energy costs.
He is under growing pressure from his backbenchers to scrap the green taxes that make up a quarter of electricity bills and cost households as much as £200 a year.
He is also facing demands to honour a Brexit campaign pledge to scrap VAT on fuel – knocking another £60 off annual bills.
Some experts fear power bills could double in a ‘year of the squeeze’ – along with higher taxes and soaring inflation. Craig Mackinlay from the Net Zero Scrutiny Group Tory MPs stated: “People are forced to pay their bills. Millions of families will become fuel poor.”
Boris Johnson, who was last night exhorted to reduce the cost living in an ’emergency’ situation and help families avoid spiraling energy bills, was last night asked by the American Red Cross.
“But, the government has the power and ability to stop inflationary pressures. This will save hundreds of millions of families hundreds upon hundreds.
He warned the Prime Minister: ‘Elections are won and lost in people’s wallets and purses. We will experience catastrophic political damage if we do not get our energy costs under control. This will impact every constituent.
The energy price cap, which sets the maximum charge for 15million customers on standard variable tariffs, is set to be raised again in April after a £139 increase in October that pushed annual bills to a record £1,277.
Former pensions minister Baroness Altmann said that there are many seniors in the country struggling to pay their energy bills. Their lives could be at risk.
Due to higher gas demand and increased Chinese demand, wholesale costs have skyrocketed. Britain, which is Europe’s largest gas user and has less storage capacity than other countries, was more affected than others.
The April cap will be announced by regulator Ofgem next month and experts believe it could hit almost £2,000 a year.
Former pensions minister Baroness Altmann said that there are many seniors in the country struggling to pay their energy bills. It could put them at risk of losing their life and their health. This is an urgent situation. It is urgent that there be a temporary reprieve on VAT’s side.
In 2015, green levies accounted for just 7 per cent of an average dual fuel bill (£86 out of £1,165), according to Ofgem. By 2020 that proportion had doubled to 15 per cent (£182 out of £1,189).
Whitehall officials have been reported to be working with energy companies to develop a loan plan that would allow them not to have to raise their bills suddenly and dramatically. Robert Halfon was among 20 signatories – including five former ministers – of a letter to Mr Johnson this weekend calling for action.
According to the Tory MP, “I am very worried about rising energy prices for hardworking people. They’re going up even more.”
“This isn’t the fault of the government, it is due to the international energy price, and I believe strongly that, given that this price cap will go up in spring this year, the Government should consider other options.
He said that green levies – which subsidise renewable energy production but also pay for homes to be made more energy-efficient – should be suspended. Octopus energy’s Greg Jackson said that green levies could be canceled by the Government. Jackson warned, “Unless something is done, we’ll start to see the very, very high consumer price increases.”
Labor has called for the removal of VAT from fuel bills. Shadow Chancellor Rachel Reeves explained that the current cost-of living crisis has caused fuel prices to rise, food costs to increase, and the budget of households to be stretched.
Shadow Chancellor Rachel Reeves stated that people currently are facing a crisis in cost of living. This has led to food prices rising, energy costs increasing, and a stretched weekly budget.
Labour has called on the government for immediate removal of VAT on heating bills in winter.
Four million UK households are considered to be in fuel poverty. National Energy Action estimates that another two million homes could fall into this category. Adam Scorer is the chief executive and stated that “The Government should take special steps to help, considering our unique circumstances.”
Campaigners worry that the campaign will negatively impact pensioners who have fixed incomes but are denied an increase to their pensions by ministers.
Caroline Abrahams of Age UK stated that if energy bills for consumers double this spring compared to a year ago it would trigger a national emergency that will impact millions of seniors. Although inflation has already started to eat into pensions, the unprecedented rise in wholesale costs will prove unsustainable.
The Government spokesperson stated that protecting consumers was our highest priority. This is why we will keep our energy price cap in effect.
‘We are also supporting vulnerable and low-income households further through initiatives such as the £500million household support fund, warm home discount, winter fuel payments and cold weather payments. Domestic fuels, such as electricity and gas, are subject to the reduced VAT rate at 5 percent.