The Chancellor and the Prime Minister are this week finalising a plan to help families with energy bills amid growing concerns about the cost-of-living crisis.
Rishi Sunak and Boris Johnson are working up a ‘package of things’ to ‘abate energy costs’, the PM said.
In April national insurance rates will rise by 1.25 percentage points and the energy price cap will rise massively.
At the same time, rocketing inflation in food and other goods could place unsustainable pressure on families.
The PM and Chancellor intend to announce the plans before February 7, when the energy price cap level is set.
Energy firms, Labour and some Tory MPs have piled pressure on ministers to axe the 5 per cent VAT rate on domestic fuel this winter.
But Treasury minister Simon Clarke yesterday played down the chances of VAT being cut on energy bills, saying: ‘We would rather target our support more closely to need.’
The PM said yesterday that the Government understands the ‘pressures that the cost-of-living crunch is putting on people and it is being driven by the inflation you are seeing around the world, particularly in energy costs’.
‘The Chancellor is looking at a package of things to abate energy costs,’ he added.
‘That is on top of all that we are doing to try and support people through this post-Covid recovery phase. What we are really seeing is the stresses and strains of the global economy fuelling inflation in the post-Covid recovery phase.’
Mr Johnson said increasing the ‘national living wage’ and cutting the taper rate on Universal Credit, along with a £12billion support package, would help people through the current cost of living demands.
He added: ‘But you’ll be hearing more from the Chancellor in due course.
‘The best way to help people with the cost of living is to have high wage, high skilled jobs and… that is one of the benefits we are seeing from Brexit.’
Rises can hit our health AND wealth
Unmanageable energy bills may damage people’s physical health as well as their bank balances, a survey has found.
People who struggle to keep their homes warm enough have higher levels of inflammation in their body – which could increase the risk of heart attacks and strokes.
This could be caused by the stress of being unable to keep warm as well as the cold temperature itself, researchers from the University of East Anglia suggested.
The study, which looked at 6,800 Britons, was published in the journal Energy Economics.
Co-author Dr Apostolos Davillas said the findings mattered because energy bills ‘are going up’ and could have a worse impact on people’s health.