Rishi Sunak has unveiled a plan to reduce rising energy bills for up to 16 million vulnerable people which he hopes will take him to No 10 Downing Street.
In a dramatic move as his Tory leadership clash with Liz Truss turns increasingly bitter, he is said to be ready to find up to £10bn to cut bills for the poorest households.
And in a jab at his opponent, the former chancellor declared in an article in The Times: “Whatever the ‘strengthening’ talk of others, you cannot heat your house with hope.”
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As the cost-of-living crisis becomes the overwhelming issue of the leadership campaign, Sunak wrote: “People need reassurance now about what we’re going to do, and I make no apologies for focusing on what more important.”
But Mr Sunak’s latest cost-of-living plan will be attacked by Ms Truss’s supporters as another U-turn and, with many party members having already voted in the leadership poll, it may have come too late to save him from defeat.
According to The Times, Sunak accepts his plan to reduce VAT on energy bills would cost £5bn and now also find up to £5bn more to help those most vulnerable to price rises.
He also predicted that as energy prices continue to rise, the government would need to raise more money from a windfall tax on energy companies, a move rejected by Ms Truss at the latest leadership calls in Cheltenham.
Benefit systems are the ‘fastest’ way to support people
In his article, Sunak said he would offer targeted support to pensioners and benefits as they “simply cannot raise their incomes to cover their energy costs and are the most vulnerable in society”.
He said universal credit, winter fuel payments and similar routes would be used to boost their incomes, with the aim of ensuring they are not worse off as a result of rising bills.
Mr Sunak’s team say that until Ofgem announces the exact level of the price cap later this month, it cannot but promise that it would cover the full cost of the increase for the most vulnerable groups.
But he stressed that his intention was to cover “as much of the hole as possible”, with households likely to be £400-£500 worse off than forecast in May.
In his article, Sunak said that if he became prime minister he would extend the scheme he launched in May which gave all households £400 off fuel costs this winter, up to £1,200 for pensioners and the benefits.
He said using the benefits system was the “quickest, most effective and most targeted way of getting support” for groups of people most in need and could be put in place before the price cap comes into force. October
“I am unequivocal that, if I step into Number 10 Downing Street at the beginning of next month, I will give the necessary support to the people who need it,” he said.
“To the parents and pensioners who are losing sleep over the looming bills, I want to reassure them that I understand, I’m on top of it and I have a plan to tackle it.
“I can’t say to the pound and penny how much help there will be because we don’t yet know the precise scale of the challenge, but I assure you that as soon as we do, I will. And I will. as much as I can to help.”
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2:46 How does UK support compare on energy bills?
Sunak denies the plan is a U-turn
Sunak said he would pay for the plan by making savings on some other projects, adding that it might be necessary to “stop or stop some things in government” because “getting people through this winter has to be the first priority.”
But in a move that will be seized upon by the Truss camp, he said he was prepared for “limited, temporary, one-off loans as a last resort to get us through this winter”.
Denying this was a U-turn, after previously attacking Ms Truss for saying she would increase borrowing, Sunak said her plans were very different.
“Borrowing relatively small sums on a temporary basis in the middle of a crisis to provide targeted support is good, Conservative government,” he said.
“Borrowing permanently for huge unfunded inflationary spending commitments is a fantasy escape.”
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He added: “You shouldn’t make promises you can’t afford to keep, and unfunded long-term tax cuts without doing the hard work of tackling inflation won’t stick.
“This is the basic honest approach to the country’s finances that we conservatives have long appreciated.”
In a further challenge to Mrs Truss, the favorite to succeed Boris Johnson as Prime Minister, she said the Foreign Secretary needed to explain how she would help those for whom the October price rise is less affordable
Read more: What have Rishi Sunak and Liz Truss promised for the country? Tory MP faults TrussSunak team promises ‘hundreds of pounds’ more for every household’s energy bills
He said: “The facts are that we have days and weeks to act before millions of Britons are left struggling with unaffordable bills. I have set out my plan. It is here in black and white.
“He appeals to those who reject my tried and tested method to explain in detail how they would get help to those who need it before their bills come due.”