20 Tory MPs and peers have written to the Sunday Telegraph urging prime minister Boris Johnson to slash environmental levies and energy taxes to stave off the cost-of-living crisis currently hitting households across the country.
While the government has said it is in regular meetings with supplies and energy watchdog Ofgem to gauge how it can best safeguard the public, wholesale gas prices are spiralling, and average bills could hit £2,000 this year according to experts.
The writing of the letter was co-ordinated by the Net Zero Scrutiny Group of Conservatives, whose role is to scrutinise government over the potential consequences of their climate targets.
Highlighting how rising costs will hit those with low incomes the most, the letter suggests that cutting the five per cent VAT rate on energy bills and suspending environmental levies could help households shave around £200 off their bills.
Robert Halfon, one of the letter’s signatories, expressed grave concerns over rising prices, with the energy price cap going up in the spring, and backed the temporary suspension of environmental levies which - he argued - amounted to “25 per cent of everybody’s energy bill” in reality.
The National Energy Action charity has indicated that by April when the energy price cap is set to go up, a record number of six million UK households will be classed as being in fuel poverty.
The Labour party has also supported the idea of axing VAT on energy bills for the winter to ease the burden on households.
The wholesale cost of gas has risen by over 500 per cent in under a year, while more than 20 energy suppliers have gone under since the beginning of September. The ousting of so many providers has seen millions of customers switched to new tariffs with other providers, some of which are higher than previous agreements and could soon be hit with a surcharge to offset the £1.8 billion cost of switching consumers' energy plans.
With inflation expected to hit six per cent by spring, the National Insurance hike to come in April and rising energy bills and stagnant wages all in the equation, the Resolution Foundation has warned that British households could face a year of tight budgets with the average household set to lose out on £1,200.
Among the government’s mitigation measures to date are a reduction in the Universal Credit taper, the introduction of cold weather payments and a freeze on duty for fuel and alcohol.
Photo by Mykola Makhlai on Unsplash
