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Evening Standard
Evening Standard
World
David Bond

Wait until the autumn for more help on energy bills, says minister

Conservative MP Mark Spencer made the comments as ministers are set to meet with energy bosses

(Picture: Rex Features/ Wiktor Szymanowicz)

A minister has told struggling families they may have to wait until the autumn before the government decides on a fresh package of financial support to ease the cost of living crisis.

There are growing calls for outgoing Prime Minister Boris Johnson and the two Tory leadership contenders bidding to replace him - Rishi Sunak and Liz Truss - to act now to alleviate what has been described as a “national emergency”.

But Leader of the Commons Mark Spencer said ministers were waiting to assess the “full extent of the challenge” before taking further action.

His comments come as Chancellor Nadhim Zahawi and Business Secretary Kwasi Kwarteng were holding talks on Thursday morning with the bosses of the UK’s big energy firms to discuss the crisis and how they might help people as they face soaring energy bills this autumn and winter – forecast by experts to rise to £4,200 a year in January.

Mr Spencer, who is supporting former chancellor Mr Sunak in the Tory leadership contest, insisted the government had already put in place a package of support, with more than 8 million of the most vulnerable families already receiving a £650 payment and a £400 discount on energy bills due to applied to household bills from the autumn.

But asked why the government wasn’t acting now to offer additional support as bills are forecast to rise further, he told BBC Breakfast: “When we get to the autumn and winter, once we know the full extent of the details and the challenge we face then we can make those decisions.

“What you are asking the government to do is look into its crystal ball. We know it’s going to be challenging but we don’t know the full extent of that challenge - once we do, then we can respond. The danger of doing what you are suggesting is you underplay it or overplay it. Let’s establish the facts and then deal with the challenge that we face.

“The government does recognise there is a huge challenge coming and we wholly recognise that, this autumn and this winter. But the time to respond to that is in the autumn and the winter.”

Ofgem is due to announce the price cap for October at the end of August with energy market experts predicting that average annual bills could rise to more than £3,500 - a 70 per cent increase on the £,1971 cap set in April.

But with Mr Johnson ruling out making any major fiscal interventions until a new Conservative party leader and the country’s next Prime Minister is chosen on September 5, the government has been accused of being complacent about the scale of the challenge.

Writing in the Guardian on Thursday, former Labour Prime Minister Gordon Brown renewed calls for Mr Sunak and Ms Truss to sit down with Mr Johnson to thrash out an emergency plan before it is too late.

“Time and tide wait for no one,” he wrote. “Neither do crises. They don’t take holidays, and don’t politely hang fire – certainly not to suit the convenience of a departing PM and the whims of two potential successors and the Conservative party membership.

“But with the country already in the eye of a cost of living storm, decisions cannot be put on hold until a changeover on 5 September, leaving impoverished families twisting in the wind.”

Although no major decisions are expected to be taken following the meeting between Mr Zahawi, Mr Kwarteng and the energy bosses in Downing Street, the firms are expected to be pressed on how they intend to help customers this autumn and winter.

A new forecast by energy market experts Auxilione said that regulator Ofgem could be forced to set the cap at £5,038 per year for the average household in the three months beginning next April.

That is more than £200 higher than previous forecasts, which were already grim, and heaps extra pressure on households across Britain. The energy consultancy also predicted that bills would reach £4,467 in January - around £200 than an estimate published by another consultancy, Cornwall Insight.

Speaking ahead of the meeting with energy bosses, Mr Zahawi said: “I want to understand what they can do for their customers, what they can do, because they’re clearly in a place now where they’re making very large profits because of that peg to the gas price.”

The meeting, which is understood to involve the leaders of the UK’s major electricity generating companies including E.On, Centrica, Drax and RWE, will also discuss plans for energy market reform and how they intend to invest in Britain’s energy sector to boost the country’s supplies.

The firms have faced criticism for making vast profits, partly due to the surging wholesale price for gas linked to Russia’s invasion of Ukraine, just as households are facing the biggest living standards squeeze in decades.

Mr Zahawi added: “Whatever happens, we need energy security and we’ve got a strong strategy that Kwasi and I will continue to push hard.

“The other area, of course, I want to look at is some of the energy producers, if you look at the renewable energy producers, the amount that they get paid is linked to gas price. So they haven’t changed anything they’re doing. They haven’t had any increase in their input costs at all. But they’re getting a much higher return because of the gas price, the unusually high gas price because of Putin.”

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