Hunt will let energy bills soar by 40% hitting millions of households

Economy Policy & Politics

Millions of households across the UK will see their energy bills soar by around 40% from April after chancellor Jeremy Hunt ruled out extending the government’s rebate scheme which ends next month.

The energy price guarantee (EPG) has capped average household energy bills at £2,500 but this will rise to £3,000 from March. Simultaneously, the government is scrapping the £400 discount it is giving every household (worth £66 per month) towards their energy bills.

It means “millions of users” will see their electricity and gas bills spike once again, the Observer reports.

When the EPG was set up by the Liz Truss government last September, it effectively capped “typical UK households” energy bills at £2,500 from October 1, 2022 for two years. A few weeks later, Truss sacked Kwasi Kwarteng as chancellor and installed Hunt into No 11 who quickly announced the £2,500 EPG and £400 energy discount would last just six months.

Labour said a better windfall tax on energy company profits – who are continuing to make record profits – would pay for extending the EPG.

As the March deadline fast approaches, calls have been escalating for Hunt to stop the EPG hike and continue the discount payments.

“Millions of households are still looking at a 40% increase in their energy bills in April. And at the same time, energy companies continue to enjoy extraordinary record profits,” said shadow chancellor Rachel Reeves.

“It is inexcusable for the government to flat-out refuse today to put in a proper one-off windfall tax on those energy giants and stop the energy price cap going up in April.

“Once again, this prime minister is too weak to stand up for working people, and would rather land struggling families with the bill.

“With a proper windfall tax on energy giants, Labour would stop the energy price cap going up in April, and our plan to get us to clean power by 2030 and to insulate 19 million homes will keep bills low for the future too.”

Hunt must ‘reassess’ slashing R&D subsidy

Hunt’s plans for the economy are causing growing concern within his own party. Greg Clark, the former secretary of state for business has urged the chancellor to ditch plans to slash tax breaks on research spending, according to the Telegraph.

Clark – the current chair of the Commons science and technology committee – said Hunt’s decision to cut tax credits for research and development (R&D) spending is based on faulty data.

The current measures allow eligible companies to claim a 130% subsidy for R&D spending. Hunt announced these will be changed in November’s Autumn Statement. From April, companies will only be able to claim 86%.

Hunt, according to the Telegraph, was told by HM Revenue and Customs that £469 million has been lost to fraud with companies claiming tax credits without any R&D work. The chancellor told the Commons in November he did not believe cutting the subsidy to 86% would have a “detrimental impact on the level of R&D investment in the economy.”

Clark said the Office for National Statistics (ONS) has concluded “there was a very large understatement in the amount of R&D done by small businesses”

He added that the government needs to “reassess whether the reduction” in the subsidy is the right thing for small and medium sized businesses “given what we now know about research-intensive industries.”

Voters view Tories as ‘party of sleaze’

Meanwhile, more than a third of Tory voters view the Conservatives as “the party of sleaze”, according to a poll commissioned by the Independent.

A Savanta ComRes survey found that 37% of people who voted Conservative in the last election hold that opinion with almost half of all voters, 45%, viewing the Tories as the party of sleaze. 14% of voters see Labour as the party of sleaze.

The same poll found just 11% of voters view the Tories as “moral” compared to 38% who regard Labour as the party of “morals”.

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