Conservative leadership candidate Rishi Sunak has vowed to provide more money to help people with their energy bills if he becomes prime minister. The exact amount of further support is yet to be determined and will depend on increases to the energy price cap. The energy regulator Ofgem is due to announce a rise to the cap – the maximum amount suppliers can charge customers per unit – on 26 August. Liz Truss’s campaign accused Mr Sunak of making “another big U-turn”.
“Three weeks ago he was saying more borrowing was irresponsible and inflationary – has he changed his mind? How can Rishi’s borrowing not be inflationary, but Liz’s tax cuts are? Intellectually it’s as watertight as a sieve,” a source in the Truss camp said.
In a statement, Mr Sunak said he wanted to keep “any one-off borrowing to an absolute minimum” and would “first seek efficiency savings across Whitehall to provide direct support for families to help with the unprecedented situation we face”. He added “there is no doubt in my mind that more support will be needed” adding “as soon as we know how much bills will go up, I will act”. Mr Sunak is competing with Liz Truss to be the leader of the Conservative Party and the next prime minister. Both Tory leadership candidates, as well as the outgoing Prime Minister Boris Johnson, are facing questions about how they will tackle rising costs.
The Bank of England has said inflation – how fast prices are rising – will hit 13% this year. Industry analysts Cornwall Insight estimated the typical household annual energy bill will be £3,358 in October, compared to £1,400 the previous year. Ms Truss’s campaign has focused on her pledge to lower taxes, which she argues will help households and boost growth. Meanwhile, Scottish First Minister Nicola Sturgeon has to request an emergency meeting, telling him only the UK government could access resources “on the scale required” to provide the required support.
Former Labour prime minister Gordon Brown has also been calling for immediate action, saying a meeting of the government’s emergency Cobra committee should be convened to address a crisis he described as leaving “millions standing on the edge of a financial precipice”. Downing Street has said Mr Johnson has no plans to introduce big tax and spending measures to ease the cost-of-living crisis before he leaves office in early September.
The Liberal Democrats for the October energy price cap rise to be scrapped. The party argues that this could be paid for by expanding the windfall tax imposed on energy company profits. Support that has already been announced by the government includes a £650 payment for the eight million lowest-income households, an additional £300 for pensioner households, and £400 for all households.
