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Daily Mirror
Daily Mirror
Business
Graham Hiscott

What more can UK do to solve energy crisis - and what is being done in other countries

Consumer champion Martin Lewis yesterday called rocketing energy prices a “national crisis” comparable with the Covid pandemic - as the out-of-touch Tories faced urgent demands to act.

Meanwhile, campaigners warned soaring bills could trigger a wave of deaths and an “epidemic” of people disconnecting themselves from heating and power.

Experts predict a jump in its energy price caps will see an average dual-fuel standard tariff energy bill jump from already hefty £1,971 a year to £3,582 - an 82% leap.

Consultants Cornwall Insight this week predicted the cap will jump to an average £4,266 in January, then £4,426 a year next April.

Martin Lewis said energy price rises are a 'national crisis' (INstagram/@martinlewismse)

But what more can the UK do to tackle the crisis?

Cut VAT on energy bills

Would it help? - The Government has long resisted calls to ditch the 5% rate of VAT on domestic energy bills.

Doing so could cut £180 off the average estimated energy bill from October, but the price cap is forecast to jump more than £1,600.

Also benefits all households, regardless of income.

Targeted help for those most in need

Would it help? - In May, then Chancellor Rishi Sunak announced a package of measures that included extra payments for those on benefits.

Additional payments now - potentially over £1,000 each - could be the quickest way to tackle the energy price surge.

But time is pressing to put in place before October, unless it went to all households.

Former Chancellor Rishi Sunak (Getty Images)

Social tariffs for those facing fuel poverty

Would it help? - We used to have such tariffs but they were phased out.

The idea is they offer below market prices for those most in need.

Could be good medium-term solution but question marks over if such tariffs could be in place this winter.

Emergency grants for councils to distribute to those in trouble

Would it help? - Could be part of the answer, but added burden on local authorities and probably requires households to be proactive, so could miss others in need.

The Government has long resisted calls to ditch the 5% rate of VAT on domestic energy bills (Getty Images)

Increased Warm Home Discount

Would it help? - The discount was £140 off electricity bills last winter for those eligible.

Increasingly the discount is a possibility but could take time.

What other countries have done to tackle soaring energy bills

France

Last September, Emmanuel Macron’s government said the gas price increase would be limited to 12.6% from October 1, similar to Ofgem’s dual fuel price cap limit at the time here.

It then went further limiting increases in power costs to 4%, with largely state-owned supplier EDF offering discount prices.

France's President Emmanuel Macron (AFP via Getty Images)

Spain and Portugal

In May, the Spanish and Portuguese governments approved a cap on the price of gas used for generating electricity in move designed to cut households’ energy bills.

Analysts estimated it would mean a reduction of 20% to 30% on the bills of around 10 million Spanish consumers, with less of an impact in Portugal.

Belgium

In February, the country announced a temporary cut in taxes and giving cash to households to compensate for soaring energy prices.

VAT on electricity was reduced from 21% to 6%, initially from March 1 to July 1, but then extended to September 30 and potentially over this winter.

The UK VAT rate on domestic energy bills is already 5%.

Netherlands

Last month it was announced low-income households could get an extra 500 eruos (£421) on top of the 800 euros (£674) already promised to offset soaring energy prices. A full budget with details is due next month.

Italy

Italian households already pay some of the highest energy bills in Europe. To help, the government announced in May a windfall tax on energy companies to fund a £12.4billion aid package.

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