Britain’s energy industry regulator Ofgem confirmed on Friday an 80% rise in the consumer price cap from October, which will increase a typical household’s gas and electricity bill from £1,971 to £3,549 a year. In an interview with the Daily Telegraph, Nadhim Zahawi said things would be “really tough” for middle income earners, as well as the most vulnerable in society. Every household in England, Scotland and Wales is to receive a £400 discount on their energy bills over the coming months, while those on Universal Credit and other benefits will receive £650. Zahawi said: “My concern is that there are those who do not have benefits. If you’re a senior nurse or senior teacher on £45,000 a year, your energy bills are going up by 80% and will probably go up even more in the new year – it’s really tough. “If you’re retired, it’s very difficult. So universal credit is a really effective way of targeting, but I’m looking at what else we can do to make sure we help those who really need the help. We are looking at all options.” Graphic Charities have warned the rise could completely “wipe out” the incomes of the poorest households, leaving millions with the threat of bills they can’t pay or the choice between heating and food this winter. On Friday Zahawi said Britons should consider cutting energy use in light of the huge rise in bills they will face under the new energy price cap. Tory leadership candidates Liz Truss and Rishi Sunak have pledged support but have not detailed how they plan to do so. The foreign secretary, who is front-runner for the next prime minister, has promised “decisive action” to offer “immediate support” if she wins the keys to No 10. But he has so far been unclear on what form that help could take apart from cutting green levies on energy bills and reversing the controversial rise in national insurance. She has argued that it is not “right” to announce her full plan before the competition is over or she has seen all the analysis being prepared in Whitehall. Her opponent, Rishi Sunak, said he would provide additional support aimed at the most vulnerable. Graphic Zahawi said he is working “steadily” to draw up options for an action plan for the next prime minister so they can “hit the ground running” when they take office in September. But he refused to rule out freezing the energy cap as proposed by Labour, insisting “nothing is off the table”. He said: “My concern about this is that it is universal. You’re helping wealthier households, households like mine, where we can take the added pressure of high energy costs, and that takes away from your ability to be resilient in the long term. Archie Bland and Nimo Omer take you to the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. “It would be about £100 billion in about 18, 24 months. If I targeted that help, I could offer more help to the most vulnerable.” He is also reported to have said he is weighing possible actions to help small businesses, including Covid-style cuts to VAT and business rates to support the hospitality and leisure sectors. “If we don’t help these small and medium-sized businesses, my concern is the scarring effect, the long-term scarring effect on the economy,” he said. “So what have we done about business rates, what have we done about VAT for certain sectors like hospitality. So we are working on all these options to consider. “And of course Liz Truss has been talking about lifting a moratorium on green levies for a couple of years. We’re also looking at this, which will help everyone by around £150. graphic Another option on the table is to give large loans to energy suppliers to help reduce bills by up to £500 a year, the Daily Telegraph reported. Labor claimed their own plan to freeze energy bills this winter would save someone on the minimum wage more than £40 a week. But the cost of its proposals has been questioned by auditors, who claimed the party had failed to take into account that people use more energy in winter, underestimating the price of the plan by at least £5bn. Labor sources disputed the analysis by the charity Full Fact and said the party had costed its plans based on consultation with Ofgem. Ofgem chief executive Jonathan Brearley said the incoming prime minister and new cabinet should “deliver an additional and urgent response to the continued rise in energy prices”.
