Chancellor Kwasi Kwarteng has cast doubt on future energy bill support as the cost of living crisis continues, saying: “You can’t borrow forever.”
It comes after Kwarteng, in his “mini budget” on Friday, said the government’s energy relief package will cost £60bn over the first six months of the scheme.
This package includes a two-year cap on the average household energy bill to £2,500 - after bills had been forecast to climb to £3,549 next month - as well as discounts for company energy bills.
Kwarteng, asked if he would be willing to keep borrowing at that level - £60bn every six months - to keep on discounting people’s bills, told the BBC’s Sunday With Laura Kuenssberg programme: “Obviously you can’t borrow forever and that’s why on Friday, I was very specific, very careful, to say we are going to have a medium-term fiscal plan.”
Watch: Mini-budget 2022: Here’s what you need to know
“We have managed to respond to two exogenous shocks,” Kwarteng said. “Two things that were not in our control and were of unprecedented scale, and that was absolutely the right thing to do.
“What I’m not going to do is to say if there is [another] exogenous, extreme event, I can’t possibly say we won’t borrow to deal with that. That’s why we have borrowed in the way we have.”
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Kwarteng’s budget has proved controversial. He said it represents a “front-footed approach” to steer economic growth, but the package, which also includes £45bn of tax-slashing measures, was met with alarm by leading economists and financial markets – with the pound tumbling to fresh 37-year lows. The chancellor brushed off questions about the markets’ reaction.
But pressed on whether he believes he has the public’s permission to slash taxes and run up government borrowing in this way, he said: “We have a responsibility in government to protect everybody and to make Britain the best it can be, and I think economic growth is absolutely essential to that”.
Kwarteng said the public will pass judgement on his programme at a “general election in the next two years”.