Jeremy Hunt makes U-turn on planned cut to energy bills support
The Treasury has performed a U-turn on a planned cut to energy support for households after warnings that it would plunge many thousands more families into poverty.
In an announcement on the morning of the chancellor Jeremy Hunt’s budget speech, the government confirmed that the energy price guarantee would continue at its current rate, which limits a typical annual household bill to £2,500. It is being extended from April, when it was due to expire, for a further three months until the end of June.
The about turn, which had been widely expected, means typical bills will not increase to £3,000 a year from April, as had originally been planned.
The move will relieve some pressure on households already struggling the cost of living. However, one-off support of £400 that was available over the winter in monthly instalments, is still due to end on 1 April.
Hunt bowed to pressure from campaigners, charities and the consumer champion Martin Lewis after they warned more Britons would be pushed into poverty unless help was extended through the summer.
The energy price guarantee keeps bills lower by paying suppliers the difference between market prices and the £2,500 ceiling. From April, that help was due to be removed, leaving consumers with only the price cap imposed by Ofgem, the energy regulator. Ofgem had announced the cap would be set at £3,280 a year for a typical household from April, which would have meant a big increase in energy costs for households.
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The wholesale cost of energy is set to fall significantly over the summer, according to forecasters, meaning the extra
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