In a world where energy costs are soaring, it can be hard to be optimistic about the future. But, Chancellor Jeremy Hunt has rejected calls to prevent sharp rises in domestic energy bills for all households in his March budget, meaning millions of users will see costs soar by about 40%. This news can be disheartening, but there is still hope as Hunt will emphasize the extra support he is giving to the poorest and most vulnerable households.
Consumer champion Martin Lewis, founder of the website MoneySavingExpert.com, has called for the Treasury to halt a planned rise in the energy price guarantee (EPG) from £2,500 to £3,000 a year for the average household in the March budget. This, combined with the extra government help with energy costs for all households, which ends in March, would result in an effective rise for all but those on the lowest incomes of about 40%.
However, Treasury insiders have said that this move is not under consideration, partly because Treasury receipts from its own windfall tax on energy companies have been less than expected, and because of worries about exposing taxpayers to future market risk. Shadow chancellor Rachel Reeves said the prospect of such steep rises for most households was frightening, and shameful at a time when energy giants were reaping huge profits.
Analysts at Deutsche Bank say maintaining the £2,500 price cap from April would only cost the government an additional £4.5bn because gas prices are falling quickly and the subsidy is unlikely to be needed by energy firms from July onwards. Analysts also said that maintaining the household price cap at £2,500 would help lower inflation.
So, while the news of rising energy costs can be disheartening, there is still hope for the future. Hunt will emphasize the extra support he is giving to the poorest and most vulnerable households, and analysts suggest that maintaining the £2,500 price cap from April would help lower inflation. It is important to stay informed and up to date with the latest news, so you can make the best decisions for your energy needs.