Ahead of an expected rise in the energy price cap of over a thousand pounds on August 26th, the Lib Dems have this morning gone further than other political parties and called for the energy price cap rise to be scrapped.
The energy price cap is the maximum amount that Ofgem allows suppliers to legally charge their customers in England, Scotland and Wales. With a further increase expected in October, experts predict it will hit £3,615 later this autumn, compared to £1,400 in October last year.
Liberal Democrat Leader Ed Davey said: “This is an emergency, and the government must step in now.Energy bills have already gone up by £700 this year, and Conservative ministers have barely lifted a finger to help.
“We simply cannot afford more inaction in the face of another even bigger rise in October.”
The Liberal Democrats claim that keeping the price cap at £1,971, its current level, will save the average household around £1,400 per year. The party have suggested that the cost of this so called ‘energy furlough’ will be £36 billion per year.
The party have suggested that this could largely be funded by windfall tax on oil and gas company profits. The current windfall tax is set to last 12 months and is expected to raise £5bn, but the party claim that the measure has potential to raise £20bn if it was increased to 30% and backdated to October 2021.
Earlier this week, former Prime Minister Gordon Brown said that millions would be pushed “over the edge” if the government does not address the cost of living crisis, and that something must happen as a matter of urgency.
Suggestions that Boris Johnson and the two candidates vying for his position, should issue a broad statement of approach or on before August 26th when Ofgem is expected to announce the energy price rise is increasing by over a thousand pounds, this morning received further support from the Director General of the CBI. Speaking on the BBC Radio 4 ‘Today programme’ this morning, Tony Danker said “I just don’t think that it is responsible government for a prime minister or future prime ministers not to give the country reassurance for 10 days, possibly three weeks”.
Mr Danker who was himself a policy advisor to the British government between 2008 and 2010, said, “Civil servants should be working with the candidates now, to make sure that on September 5th we get the answers, not we get an announcement of possible answers in 10 days time. We do that during a general election. I don’t know why we don’t have civil servants working with both candidates to get plans ready to be announced on September 5th”.
Last night, the former chancellor Rishi Sunak said he would cut an average of £160 off bills by temporarily scrapping VAT.He also vowed to use the same support plan he set out earlier this year to help those hit hardest by increasing energy bills.
He says that the original support package, including a universal payment of £400 and extra means-tested payments for those on benefits, will be extended. Sunak quashed concerns of rising debt and claimed he would keep borrowing to a minimum by using “efficiency savings across Whitehall.”
In response, the Truss campaign have branded Sunak’s new plans as “another big U-turn,”, asking “How is he going to fund these new promises? Three weeks ago he was saying more borrowing was irresponsible and inflationary. Has he changed his mind? Intellectually it’s as watertight as a sieve.” Ms Truss herself has been campaigning on the basis of a ‘tax cutting’ emergency budget.
This evening, Liz Truss and Rishi Sunak will today appear at another hustings event in Darlington, the area turned from Labour red to Conservative blue under Boris Johnson.
In response to the proposal, a government spokesperson said: “We know the pressures people are facing with rising costs, which is why we are providing £37 billion of help for households.”
