Household energy bill support extended for extra three months
A cap on household energy prices will be extended for another three months, the Government confirmed on Wednesday.
The measure will save millions of families £160 on their gas and electric bills, the Treasury said.
Ahead of his 2023 Budget, Chancellor Jeremy Hunt announced that the Energy Price Guarantee (EPG) will not rise in April as planned after the cost of gas fell sharply.
It means average bills will be capped at £2,500 until June, rather than increasing to £3,000 next month as planned.
The Treasury U-turn is expected to cost the Government around £3billion.
It comes as Mr Hunt is set to confirm new cost of living support during his Spring Budget, including ending the energy pre-payment meter premium and help with childcare costs.
Mr Hunt said: “High energy bills are one of the biggest worries for families, which is why we’re maintaining the Energy Price Guarantee at its current level.
“With energy bills set to fall from July onwards, this temporary change will bridge the gap and ease the pressure on families, while also helping to lower inflation too.”
Prime Minister Rishi Sunak said: “We know people are worried about their bills rising in April, so to give people some peace of mind, we’re keeping the Energy Price Guarantee at its current level until the summer when gas prices are expected to fall.”
But opposition MPs said the intervention did not go far enough.
Liberal Democrat Treasury spokesman Sarah Olney called for bills to be cut by £500, adding: Instead of a sticking plaster we need meaningful action now.
“In three months time families will once again be facing a cliff edge of unaffordable heating bills.”
Regulator Ofgem puts a cap on the amount energy suppliers can charge customers on default or standard and variable tariffs.
The price cap, launched in January 2019, was originally a temporary measure, but has remained in place because of problems in the industry.
It applies to homes on a default energy tariff, whether you’re paying via direct debit, standard credit or a prepayment meter.
In response to soaring gas and electricity prices in September, then Prime Minister Liz Truss announced that the typical UK household would pay no more than £2,500 a year for energy for two years.
Without intervention at the time, the average household bill would have jumped 80 per cent from £1,971 to £3,549 a year.
When Mr Hunt became Chancellor in October he dramatically scaled back the support package and ditched tax cuts promised by his predecessor, Kwasi Kwarteng, as he sought to restore stability following huge turmoil in the financial markets.
Government support has saved the typical family £1,300 since October and stopped the average household energy bill hitting £4,279 a year over the winter.
On Wednesday Mr Hunt will deliver his first Spring Budget, which the Treasury said would focus on “easing the impact of rising prices, delivering on the promise to halve inflation, and grow the economy by supporting more people into work”.