Boris Johnson has waded into the Tory leadership row over energy costs by declaring he is “absolutely certain” his successor will deliver more help to households as annual bills were forecast to top £4,200 in January.
Johnson made an unexpected intervention on energy bills at a Number 10 reception as Rishi Sunak’s campaign accused Liz Truss, the favorite to be the next prime minister, of being “divorced from reality” over the his refusal to commit to further deliveries.
Johnson has repeatedly refused to act on the skyrocketing gas and electricity bills before leaving office on September 5, but said he was sure the next prime minister “will want to make some more announcements in September/October about what we will do later. to help people in the coming December/January period”.
He added: “I just want you to know that I am absolutely confident that we will have the fiscal firepower and the space to continue to take care of people as we have done throughout.”
The deepening row over how to help households came on the day annual energy bills were forecast to top £4,200 from January, prompting a warning that Britons face “severe difficulties at scale massive” without government intervention.
At the same time, government sources admitted that officials had modeled the possibility of a four-day power shortage in the first quarter of next year, which could require power outages for industry and homes.
Johnson’s comments add more pressure on Truss to acknowledge that, as prime minister, she should give more help to households beyond tax cuts.
As Truss doubled down on his plan to reverse the rise in National Insurance and scrap £150 of green fees, a spokesman for Sunak’s campaign said his proposals “won’t touch the sides of most families of Britain this winter and pensioners will get no help at all.” .
Consultancy Cornwall Insight said on Tuesday it expected the energy price cap to reach £4,266 a year in the first three months of next year, more than triple the level of the previous year and more than double the current level.
Any winter energy shortages caused by less gas and electricity from Norway and the rest of Europe could push prices up even further.
But Truss said at the weekend that he does not want to hand out “handouts” to people struggling with bills, preferring instead to prioritize tax cuts. On Tuesday he repeatedly refused to promise more help on energy bills, only confirming his plans to reverse the recent rise in National Insurance and temporarily suspend green rates on energy bills.
Truss doubled down on his economic stance on Tuesday night branding the cash handouts to help with the cost of living the “Gordon Brown economy”.
Speaking at the Tory hustings in Darlington, which were dominated by questions about bills, the Foreign Secretary stressed that she believed the best way to help with the cost of living was to cut taxes, starting with National Insurance . “I didn’t agree with raising National Insurance. We promised not to in our manifesto and we need to help those people who are struggling with the cost of living.
“We must stand by the self-employed. We need to stand with people who work and do the right thing and let people keep more of their own money. They are conservative principles.
“What I can’t stand is taking tax money out of people and then giving it back in handouts. That to me is Gordon Brown economics.”
Sunak, in turn, warned that the British people “will not forgive us” if vulnerable households do not receive additional direct help this winter.
The former chancellor said Truss’s plans would not help sections of the population and said whoever became prime minister should not rule out direct support. Truss has said he will focus on tax cuts rather than pledging additional direct help with energy bills.
“If you’re a pensioner, if you’re on the ‘national living wage’, the tax cuts are worth zero,” the former chancellor said. “This is not a policy to help people through the winter and I think it is wrong to rule out aid outright because we, as a Conservative government, have an obligation to help the most vulnerable.
“If we don’t do this, not only will the people suffer, but we will be absolutely screwed when it comes to the next election. The British people will not forgive us if we don’t.”
Critics of his policy warn that the tax cuts disproportionately help the better off and offer no assistance to pensioners or those out of work, while green taxes only contribute around £150 a year to the average bill.
“What is vitally important at the moment is that we get economic growth going,” Truss told reporters on a visit to Huddersfield in West Yorkshire.
“Right now we have the highest taxes in the last 70 years. That’s why I believe in lower taxes, to boost growth, to encourage companies to invest, and so there will be more money in people’s pockets.”
Asked if he ruled out any further help for energy bills, Truss replied: “What I promise is that from day one, people will have lower taxes. They will also have lower energy bills, because I will put a temporary moratorium on the green energy rate. But what we need is a growing economy.”
Meanwhile, Sunak confirmed in an interview with ITV that he would likely offer “a few hundred” pounds in rebates on energy bills after the increase was confirmed.
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On Monday, the Liberal Democrats called for an “energy permit scheme” in which the government would fund the full cost of any increase in the energy price cap in October.
While Labor has said it would give extra help to households, funded by ending tax breaks for energy companies, one of the party’s MPs has argued it should go much further.
In an article for The Guardian, Zarah Sultana said that since Johnson accepted Labour’s idea of a windfall tax on energy companies in May, his party “doesn’t offer enough” for people struggling with bills . The Coventry South MP has set up a campaign called Enough is Enough to seek more action on the cost of living.