Prime Minister urged to treat price hike as “emergency” and resolve cost of living crisis

Boris Johnson was urged today to tackle cost-of-living “emergencies” and save families soaring energy bills.

He is under increasing pressure from his backbench MPs to remove green taxes which account for a quarter of electricity bills and cost households up to £ 200 a year.

He also faces demands to honor the Brexit campaign’s pledge to remove VAT on fuel, reducing annual bills by an additional £ 60.

Some experts fear electricity bills will double in a “year of tightening” – with higher taxes and soaring inflation. Craig Mackinlay of the Net Zero Scrutiny Group conservative MPs said: “People have no choice but to pay their bills, so millions of families will be fueled by fuel poverty.

Boris Johnson was called on last night to tackle ’emergency’ cost of living and save families from soaring energy bills

“But the government has the power to prevent these inflationary pressures and save hundreds of pounds sterling for millions of families.”

He warned the Prime Minister: “Elections are won and lost in people’s wallets and purses. If we don’t get energy costs under control, we will suffer catastrophic political damage that will affect every constituency. ‘

The energy price cap, which sets the maximum load for 15 million customers on standard variable tariffs, is set to be raised again in April after a £ 139 increase in October that pushed annual bills to a record high of £ 1,277.

Baroness Altmann, former Minister of Pensions, said:

Baroness Altmann, former pensions minister, said: “There are so many elderly people across the country who are already struggling with their energy bills. It could be life threatening.”

Wholesale costs have skyrocketed due to increased demand from China and declining gas supplies. Britain has been hit harder than many other countries as it is one of the biggest users of gas in Europe while having less storage capacity.

The April cap will be announced by regulator Ofgem next month and experts believe it could reach nearly £ 2,000 a year.

Baroness Altmann, former minister for pensions, said: “There are so many elderly people across the country who are already struggling with their energy bills. It could be life threatening and will definitely put their health at risk. It’s an emergency A kind of temporary reprieve, ideally on the VAT side, is really important at the moment.

In 2015, environmental taxes only represented 7% of the average double fuel bill (£ 86 out of £ 1,165), according to Ofgem. By 2020, that proportion had doubled to 15% (£ 182 out of £ 1,189).

Whitehall officials are reportedly working on a loan program for energy companies that would allow them to avoid having to impose sudden and massive increases in their bills. Robert Halfon was among 20 signatories – including five former ministers – of a letter to Mr Johnson over the weekend calling for action.

The Conservative MP said: “I am very worried about the rising energy costs for hardworking people and they will increase further.

“It’s not the government’s fault, it’s because of the international price of energy, and I firmly believe that since the price cap will increase this year in the spring, the government should consider other measures. “

He said green taxes – which subsidize the production of renewable energy but also pay for homes to be made more energy efficient – should be suspended. Greg Jackson, of Octopus Energy, said the government could remove green taxes on consumers, warning: “Unless action is taken, we will start to see these very, very high increases trickle down to the consumer market. the consumption.”

Labor calls for the elimination of VAT on fuel bills. Phantom Chancellor Rachel Reeves said: “Right now people are hit by a cost of living crisis that has seen energy bills skyrocket, food costs rise and the weekly budget stretched.

Phantom Chancellor Rachel Reeves said:

Phantom Chancellor Rachel Reeves said: “Right now people are hit by a cost of living crisis which has seen energy bills skyrocket, food costs rise and the weekly budget stretched.”

“This is why Labor is calling on the government to immediately remove VAT from household heating bills during the winter months.”

Up to four million households in the UK are classified as living in fuel poverty and the National Energy Action charity believes another two million may soon join them. Managing Director Adam Scorer said: “The government needs to take special measures to try to help, given the special circumstances we are facing.”

Campaigners fear that retirees will be disproportionately affected because they have fixed incomes and are denied an increase in their state pensions because ministers suspended the “triple lockdown”.

Caroline Abrahams, Age UK, said: “If energy bills do indeed double for most consumers this spring, compared to a year ago, it will precipitate a national emergency affecting millions of older people. ‘Inflation is already eating away at their pensions, but this unprecedented rise in wholesale prices will be totally unsustainable.’

A government spokesperson said: “Protecting consumers is our top priority, which is why our energy price caps will remain in place.

“We are also further supporting vulnerable and low-income households through initiatives such as the £ 500million Household Support Fund, the Hot House Rebate, Winter Fuel Payments and Payments. in cold weather. Household fuels such as gas and electricity are also already subject to the reduced 5 percent rate of VAT. ‘

Questions and answers on the energy bill crisis

How much do environmental taxes add to bills?

The latest figures from the energy watchdog Ofgem show that 25.48% of electricity bills in August 2021 were for “costs related to environmental and social obligations”. On gas bills, it was only 2.46 percent. According to Ofgem, the average bill for a mixed household was £ 1,184 in 2020, with £ 182 for green taxes.

Who receives the money?

Mainly the government – to pay for “environmental and social programs”. These range from the Hot House Rebate, which gives a rebate of £ 140 each year to poor retirees, to feed-in tariffs, which pay homeowners for the energy they produce using green technologies such as solar panels.

Who brought them?

Some were introduced under Labor, but tariffs have skyrocketed under the coalition government. David Cameron would then have told the ministers to “get rid of all this green shit”. Green tariffs will also start paying for a £ 450million program for heat pumps to replace gas boilers.

Are environmental taxes still necessary?

Probably not, because the cost of supplying renewable energy has fallen so much. It is also argued that phasing out gas boilers should wait until replacements are better and cheaper.

Is there another way to raise money?

The transfer of the burden to general taxation is an option. The rich would then pay more, rather than everyone paying roughly the same in energy bills.

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