A minister has stressed that he is “very, very proud” of the government’s measures to tackle cost of living issues.
Foreign minister James Cleverly said the cabinet “absolutely recognise” the issues associated with the fifty per cent energy price cap jump set to be rolled out from April.
This morning Ofgem is scheduled to confirm the price cap rise, with experts estimating that bills could surge to around £1,915 for the average UK household.
In an interview with Times Radio, Cleverly stressed the global dynamic of rising energy costs, explaining: “The situation in Ukraine has played a part in what has been a global increase in wholesale gas prices and that’s had a knock on-effect through the supply chain right through to the energy companies in the UK and ultimately to people’s bills so I don’t know what the price cap change will be.”
Wholesale gas costs have rocketed in recent months – rising by over 500% in under a year.
With much of this rise occurring since the current price cap was set in October, suppliers are losing up to £400-£600 per household because they cannot charge what it currently costs to provide energy to their customers.
As a result, 27 suppliers have exited the market since August, in addition to Bulb entering special administration in December.
“So this is why the number of measures that the Government has put in including money for pensioners to keep their homes warm, targeted support for lower income families, is incredibly important, increasing the National Minimum Wage so that employed people at the lower end of the salary spectrum get more money,” Cleverly went on.
“These things are really important. My understanding is the Chancellor will be making further statements later on. We absolutely recognise the pressure this puts on some families and that’s why both our general support and our targeted support is so important. I’m very, very proud we put those support packages in place,” he further explained.
Rishi Sunak is expected to address MPs at 11:30 this morning to outline further measures.
The CBI’s director-general Tony Danker told Sky News this morning that Sunak’s expected measure to ”smooth this cliff-edge of rising energy bills” was “good news”..
However he said he was “not sure” “put[ting] loans on the books of energy companies,” was the best way forward following reports this features in the chancellor’s plans.
“I think my concern and everyone’s real concern is that this rise in gas prices, in energy bills, is not just going to be a one-off, we are probably looking at two or three years of very high energy bills,” Mr Danker elaborated, pointing to the already high amount of public spending and plans to hike taxation..