The head of the Confederation of British Industry has called on Boris Johnson to take immediate action to help people with soaring energy bills, warning that putting it off until after the Conservative leadership vote would be too late.
Tony Danker told BBC Radio 4’s Today programme that Johnson “needs to say something to the country to reassure people about what will happen” ahead of Ofgem’s announcement of “terrifying” price rises on 26 August.
When the new prime minister is chosen on 5 September, they “need to tell us what will happen, not put it off for a couple of weeks while they do preparations for the emergency budget”, he said.
It came as energy analysts Cornwall Insight said energy bills would rise by about £200 more than it previously thought between October and November and increase even further in January.
The energy consultancy said typical household bills would reach approximately £3,582 a year. It then forecast bills at £4,266 from January and £4,427 from April. The cap is then expected to start falling, down to £3,810 in the three months from July and £3,781 from October next year.
Danker urged Johnson to meet his two potential successors, Liz Truss and Rishi Sunak, to thrash out “the principles given they disagree on the mechanics” so the new prime minister is able to implement their plan on 5 September as “people are going to start making decisions now about their finances and life choices”.
Meanwhile, the MP Mark Harper, a leading Sunak supporter, said Truss’s tax cuts plan favoured the wealthy rather than providing direct support to the poor and most vulnerable to help with rising inflation.
He said her plans would give high earners such as the prime minister a tax cut of £110, while those on the “national living wage” would only receive about £50 and pensioners nothing.
He told Sky News: “There’s a fundamental difference of opinion between the two leadership candidates. Rishi thinks we need to give direct support to people, that we can’t just cut taxes because poor people don’t pay a lot of tax. Liz Truss thinks we can cut national insurance but that gives a big boost to people on the biggest incomes.”
Noting that the civil service was already drawing up plans for both candidates’ approaches before the vote on 5 September, he said the public wanted “somebody with the grip and experience to deal with the economic challenge” ahead, and that he worried a Truss win would jeopardise the Conservatives’ prospects in a general election.
Sunak threw down the gauntlet to Truss on Monday by pledging to provide similar help with energy bills to his last package of measures, amounting to £400 a household and £650 for the most vulnerable – a £15bn overall package.
“This winter is going to be extremely tough for families up and down the country, and there is no doubt in my mind that more support will be needed,” he said.
Over the weekend, Truss had said she would “do things in a Conservative way of lowering the tax burden, not giving out handouts”, although her team later said this had been misinterpreted and she could look at further measures.
Writing in the Times, the deputy prime minister, Dominic Raab, said “people are facing some very tough circumstances in the months ahead” and that household budgets would be under pressures “well beyond the living memory of millions of voters”.
He said “an emergency budget that fails to measure up to the task” would “read unmistakenly to the public like an electoral suicide note” and see the party “cast into the impotent oblivion of opposition”.
He wrote: “A response to the challenges people are facing that stops at limited tax cuts, which do little for the most vulnerable, isn’t Conservative politics. It’s bad politics.”