A source told Sky News that Mrs Truss “will look at options to help people but it would not be right for her to announce her plans before the Prime Minister is elected or sees all the facts”. Estimates show such a cut in VAT would save the average household over £1,300 a year, while the Institute for Fiscal Studies said it would cost taxpayers £3.2 billion a month, or £38 billion over a year. Use Chrome browser for more accessible video player 4:53 How will energy prices hit households? Mr Sunak’s team criticized the plan as expensive and “incredibly regressive”. A source close to Mrs Truss’ discussions told The Sunday Telegraph: ‘They [the Treasury] they have talked about Gordon Brown’s approach following the time (of the financial crisis) when consumer confidence seemed to be falling. “They talk about the last big financial shock that hit the whole economy and consumers in 2008 and the Treasury’s response to that.” And another claimed she “doesn’t have time” to offer targeted support, warning: “People will start leaving the moment she takes office.” Mr Brown announced an annual cut in VAT from 17.5% to 15% in December 2008 in response to the financial crisis. Liz Truss and Rishi Sunak are under increasing pressure to say how they will help the millions of Britons struggling with record energy prices and inflation. Use Chrome browser for more accessible video player 0:44 “My spending approach is right” 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 Other options being considered by Ms Truss include extending the 5p cut in fuel road duty beyond March and reintroducing business support seen during the worst of the COVID-19 pandemic, such as the biggest cut in VAT for hospitality, tourism and agriculture. Sasha Lord, Greater Manchester overnight economic adviser, said on Saturday: “There is no cap on the price of energy for hospitality. An unacceptable situation. “Without intervention, unfortunately we will see closures like never before in our lifetime. It’s criminal.” He tweeted a post from the owners of the Rose and Crown pub in Merseyside, who said they had received an offer of £61,000 for their electricity bill. The Sunday Times reported that Ms Truss’ team is also considering scrapping the personal tax-free, raising the point at which people pay the 40% tax rate and reducing the basic tax rate below 20%. One insider told the paper that if Ms Truss decided against immediate tax cuts, they could be incorporated into a longer-term overhaul of the tax system, which she is expected to announce alongside a budget package. Mr Sunak wrote in the Times on Saturday that help with energy bills should go to low-income households and pensioners through the welfare scheme, winter fuel and cold weather payments. He also acknowledged that providing ‘substantial support’ would be a multi-billion pound undertaking.’ A Treasury spokesman said the department was making the “necessary preparations” to ensure the next government has options to provide additional aid “as soon as possible”. Meanwhile, in his final days as prime minister, Boris Johnson said the UK’s future “will be golden”, despite the “very difficult” months ahead. Writing in The Mail On Sunday, he blamed Vladimir Putin for worsening the crisis, saying: “It was Putin’s invasion of Ukraine that spooked the energy markets. It’s Putin’s war costing British consumers. “That’s why your energy bill is doubling. I’m afraid Putin knows it. He likes it. And he wants us to bend.” Last week, energy regulator Ofgem announced that the price cap will rise by 80% from October, meaning a typical default tariff customer will pay £3,549 a year. The latest forecasts from energy consultancy Cornwall Insight are for the price cap to exceed £6,600 in April. It sparked calls for more government help aimed at the most vulnerable, but Chancellor Nadhim Zahawi said even those on higher wages could struggle in the coming months. It says Britons on £45,000 may also need support to pay their energy bills.
