Nadhim Zahawi also told the Daily Telegraph that households should try to reduce energy consumption and that he fears gas prices could remain high for another two years. Millions of households will see their energy bills soar in the autumn after the price cap rose to £3,549 a year – a record 80% rise. While every household in the UK gets a £400 discount on their energy bills, Conservative leadership candidates Liz Truss and Rishi Sunak are calling for further action. However, there has been debate over whether the extra support should be spread widely or focused on Britons on the lowest incomes. Mr Zahawi told the newspaper: “My concern is that there are those who do not receive benefits. If you’re a senior nurse or a senior teacher on £45,000 a year, you’ve got your energy bills going up by 80% and it’s probably going to go even higher in the new year – it’s really tough.’ While he said Universal Credit was a “really effective way of targeting”, he said other ideas were being explored “to make sure we help those who really need the help”. Mr Zahawi is said to have outlined a range of options for the next prime minister to consider – and despite calls for urgent action from industry regulator Ofgem, Ms Truss said it would not be “right” to announce the full plans of to address costs. life crisis until a new Conservative leader is appointed on September 5. The chancellor went on to warn that the UK was “in a national economic emergency”, adding: “This could go on for 18 months, two years if Putin continues to use energy as a weapon.” Read more: Explainer: Everything you need to know about higher bills Analysis: Even those who have done the right thing won’t escape the effects of rising energy bills Use Chrome browser for more accessible video player 4:53 How will energy prices hit households? Businesses fear rising energy bills In other developments, 26% of SMEs surveyed by YouGov have warned that their energy bills will be unsustainable within 12 months. And of the companies already paying more for gas and electricity, 75% said they would have to pass that cost on to their customers. Additionally, 5% of all businesses surveyed said their current energy bills are already unaffordable. Mr Zahawi told The Telegraph that the government plans to offer support to small businesses and said there would be “a long-term scarring effect on the economy” without it. The proposals could include reducing VAT for certain sectors – a return to a policy that was in place during the coronavirus pandemic. Use Chrome browser for more accessible video player 6:13 Because high energy bills are hitting everything Politicians are feeling the heat In total, around 24 million households will be affected by the price increase. The rising wholesale cost of natural gas – fueled by Russia’s invasion of Ukraine – has driven up the peak energy price, which is widely expected to rise even further next year, with average bills expected to reach 5,386 £ in January and £6,616 in April, according to analysts. Cornwall Insight. It increases the pressure on households already struggling with rising food and fuel prices. Sky News found that a third of households are already struggling to pay their energy bills, while Philippe Commaret, chief executive of energy giant EDF, says half of UK households could be in fuel poverty in January. Subscribe to the Daily Podcast on Apple Podcasts, Google Podcasts, Spotify, Spreaker Ofgem chief executive Jonathan Brearley told Sky News the price cap would be “devastating news” for many people. Putting the rise in context, he added: “When I look at winter prices now for the gas market, it’s 15 times what it normally is. If that was the case for petrol, that would mean it would cost £400, £500 for to fill up our car.” Boris Johnson has stressed that he will leave important decisions on additional support to his successor. Ahead of the increase, frontbencher Liz Truss said she would use an emergency budget to “make sure support is on the way” if she becomes prime minister. Her opponent Rishi Sunak has pledged more targeted support and removing VAT from energy bills. Labor claimed Mrs Truss’ plans to tackle the cost of living crisis would leave four million families “lost out” if further direct support was only given to those on benefits.
