Boris Johnson comments on energy crisis
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Households in Britain are all set to undergo drastic change with a rise in gas and electricity prices from April. The legal cap on domestic energy prices is set to rise, allowing companies to pass some of the pain of sky-high wholesale prices seen in recent months to consumers.
Bills could rise from £1,277 a year under the current price cap to £1,865-a-year, an increase of 50 percent, according to estimates.
However, the level of the cap will be finalised by the regulator Ofgem next month.
The Prime Minister is facing huge pressure from his own backbenchers to provide support to consumers who will face the largest brunt, as fears grow of a looming cost of living crisis.
Speaking during a Downing Street press conference on Tuesday, Mr Johnson raised doubts over the efficacy of such a move, while hinting that further measures to alleviate rising costs could be around the corner.
Mr Johnson said he was “not ruling out further measures”, adding the potential was there “in the freedom to regulate our own VAT”.
He said: “The argument is that it’s a bit of a blunt instrument and the difficulty is you end up cutting fuel bills for a lot of people who perhaps don’t need the support in quite the direct way that we need to give it.
“We need to help people who are in fuel poverty the most.”
Mr Johnson continued to say that he appreciated the “difficulties that people are facing because of the increase in gas prices”, adding that he would “continue to listen to businesses and consumers on how to abate the cost of energy”.
His comments came after his official spokesman distanced the Government from the suggestion that removing VAT from domestic fuel bills would cut costs for households.
The official spokesman told The i: “Obviously we will consider any policy proposals but going further would not guarantee prices fall, given that price rises are driven by a number of factors which we are seeing played out worldwide.”
Number 10 also defended the use of green levies on bills to fund renewable energy.
The spokesman added: “The exposure to volatile global gas prices underscores the importance of our plan to build a strong, homegrown renewable energy sector to further reduce our reliance on fossil fuels.”
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Shadow chancellor Rachel Reeves told The i: “Boris Johnson promised not once but three times to cut VAT on household energy bills during and after the Brexit referendum campaign.
“Yet now he’s happy to go back on his word, and is trying to muddy the waters on a change that would help ease the burden on households facing soaring energy bills.
“It’s one broken promise after another from a Prime Minister distracted by his own scandal and incompetence.
“Labour would scrap VAT from home energy bills this winter to help households facing growing costs.”
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