According to The Sun, chancellor Nadhim Zahawi and business secretary Kwasi Kwarteng are to meet with energy firms to discuss how the burden of rising prices on households can be alleviated.
With many households believed to be in energy debt already, there are fears that more could plunge into fuel poverty when the energy price cap increases in October and inevitably again in January.
Data published by price comparison site USwitch suggests that nearly a quarter of households owe £206 to energy companies on average, with the total debt owed by members of the public treble that of September 2021.
By January, it has been predicted that the average annual energy bill could exceed £4,200.
Ministers have come under fire for not doing more to help households with the rising cost-of-living beyond the package of measures announced in May, but outgoing prime minister Boris Johnson has suggested that further action will be up to his successor and will have to wait until after September 5 when they are appointed.
Meanwhile, Parliament is currently in recess and there are no plans to recall MPs prior to their scheduled return, which is also on September 5.
The meeting between ministers and energy bosses also comes amid concerns around the state of the windfall tax announced in May, which is partially funding the £15 billion package of support which has already been unveiled for households.
The Treasury estimates that the windfall tax, known as the energy profits levy, could raise around £5 billion. However, it only came into effect on May 26 and so the excessive quarterly profits already declared this year by energy firms will not be subject to it.
The Liberal Democrats have said that the tax should be raised from 25 per cent on UK energy profits to 30 per cent and backdated to October 2021.
Elsewhere, former chancellor Rishi Sunak and incumbent foreign secretary Liz Truss are jostling to succeed Johnson as PM in the Tory leadership contest run-off.
Truss has talked down what she called the “bizarre” idea of coming together with Johnson and her leadership rival and discussing policies to help households now, labelling such a move “Gordon Brown economics”.
Sunak, however, has suggested that he would be willing to engage in such a meeting to set out policy ahead of the autumn and support households more promptly.
The candidates’ respective approaches for dealing with the cost-of-living crisis are diverging ones in themselves. The Truss camp continues to advocate for tax cuts including scrapping green levies on energy bills and reversing the National Insurance increase to put more money in people’s pockets, rather than “handouts”.
However, Sunak has warned that the electorate would not look fondly on the Conservative party if further targeted support is not provided and inaction would cost them the next general election.
Sunak’s campaign is yet to set out the further help it would provide households on top of existing support, with the former chancellor saying he would wait to assess how far energy bills were set to rise before acting.
Photo by Matthew Henry on Unsplash
