Tag Archives: energy price cap

Jeremy Hunt continues with the Conservative Government’s trashing of the economy

By Michael Berwick-Gooding | Wed 19th October 2022 - 6:27 pm

While it was right for Jeremy Hunt in his statement on Monday to cancel £32bn of the mini-budget it was wrong to end in April 2023 the energy cap price freeze. It is predicted that the energy price will now increase to £4,347 in April 2023. This is an increase of 73.9% which is much higher than the 54.2% increase of April this year which might have been the cause of the 2% increase in inflation in April. Therefore by ending the energy cap price freeze inflation might increase by 3% in April 2023. Jeremy Hunt stated that the energy cap price freeze would have reduced inflation by 5%.

If the support is only for the poorest in society then average households will have to find £2247. For someone on average earnings of £32,084 this is about 8.7% of their net earnings. Most people can’t afford to find 8.7% of their salary to pay for energy on top of the general inflation rate in the economy of over 10%. These pressures on household income even without the Bank of England increasing interest rates making them worse will lead to an economic recession possibly in the region of a 5% decline in the size of the economy.

Jeremy Hunt has talked of public spending cuts and this will have a further adverse effect on the economy. He should have gone further with the mini-budget reversals and cancelled the changes to Stamp Duty, the increase in the Annual Investment Allowance to £1 million, and the wider reforms to investment taxes which next year would have increased government revenue by £3.8bn and more after that according to government figures.

Cancel October energy price rise says Ed Davey

By Caron Lindsay | Tue 9th August 2022 - 8:48 am

Just last Friday I was saying that while we were saying some good things about the cost of living emergency, we needed to come up with something bolder to deal with such a massive economic shock.

I should have been more patient. Ed Davey has stepped up to the mark, calling for October’s energy price rise to be cancelled, with part of the cost covered by a windfall tax on the energy companies. Given that some of them are making quarterly profits larger than the GDP of some countries, that is entirely justifiable.

Under our plans, the 70% increase in the energy price cap expected to be announced by Ofgem later this month would be cancelled, with the Government instead paying the shortfall to energy suppliers so that they can afford to supply customers at the current rates. The party estimates that this would save a typical household an extra £1,400 a year.

This is not cheap, but the party says that the estimated £36 billion cost should be met by expanding the windfall tax on oil and gas company profits, and using the Government’s higher-than-expected VAT revenues as a result of soaring inflation.

The party is also calling for more targeted support for vulnerable and low income households. This would include doubling the Warm Homes Discount to £300 and extending it to all those on Universal Credit and Pension Credit, while investing in insulating fuel poor homes to bring prices down in the long term as well as reinstating on permanent basis the £20 per week Universal Credit uplift introduced during the pandemic.

Ed said: