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New Chancellor Jeremy Hunt has forced Liz Truss to make several sweeping changes to her fiscal policy since he replaced Kwasi Kwarteng. He has gutted the ill-fated September mini-budget, with only a few of Mr Kwarteng’s policies remaining. Mr Hunt has most notably altered the Government’s planned energy guarantee, which ministers had designed to save Britons millions of pounds on their bills.
How much will energy bills cost?
One of the Truss Government’s notable first policies was a £2,500 cap on energy bills.
The energy price guarantee was activated earlier this month and was due to last for at least two years.
But ministers want to review the policy until it costs “significantly less than planned”.
READ MORE: Jeremy Hunt’s mini-budget U-turn to feared to double energy bills
Mr Hunt is yet to confirm how the pared-back energy plan would function, and experts believe the Government will seek to target its energy measures after April rather than apply them broadly across the UK population.
Politicians usually reserve targeted aid for the country’s lowest earners, but rescinding the energy price guarantee will leave millions of people with insurmountable bills.
Leading industry forecasters have suggested the average UK energy bill could rise beyond £4,000 a year.
In six months, Cornwall Insight has predicted the price cap will push the typical dual-fuel tariff to £4,347.
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Ofgem had planned to raise the cap to £3,549 from October, and the firm suggested the regulators would make a similar move next year.
Cornwall Insight projected the cap would rise to £4,347 in April, followed by a slight reduction to £3,697 between July and September.
Energy consultancy BFY Group has forecast an even steeper rise for middle-income homes not covered by targeted help.
The firm predicted typical annual bills could rise to £4,500 by next year.
Matt Turner, a consultant at BFY, told the Financial Times that ineligible middle-class billpayers would struggle to meet these demands.
He said: “While a targeted scheme could provide more sustainable support in the longer term, there is a ‘stretched middle’ who earn too much for typical support yet not enough to face £4,500 energy bills.”
Questions remain about how the Government will target its energy bills assistance.
Speaking to the BBC, National Energy Action chief Adam Scorer asked: “Who will still get support? Will it include vulnerable households not on welfare benefits? Will that support be deeper for those in greatest need?”
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