Jeremy Hunt shared his first autumn statement as chancellor this morning. In order to rein in inflation and pave a ‘balanced path to stability,’ he announced tax increases and spending cuts.
However, a key question for many centred around what might happen if the Energy Price Guarantee ended in April. Hunt announced that help with energy bills will continue beyond April 2023 for another 12 months, however, household energy bills will increase. The typical household energy bills will rise to a maximum of £3,000 a year from April, from £2,500.
Energy bill help extended in autumn statement today
Jeremy Hunt said this winter, the Government will stick with the plan of his predecessors to spend £55bn to help households and businesses with energy bills. ‘From April we’ll continue the Energy Price Guarantee for another 12 months,’ said Hunt.
This will equate to an average of £500 of support for every household, he said, and prevent average household bills from exceeding £3,000.
There will also be an additional cost of living payment of £900 to households on means-tested benefits. £300 will be paid to pensioner households and £150 to individuals on disability benefit.
A new ‘temporary’ 45% tax on companies that generate electricity was announced, applying from January 2023. Windfall tax on profits of oil and gas firms will also be increased from 25% to 35%, and extended until March 2028, says BBC News (opens in new tab).
Future plans for energy efficiency and independence
The chancellor spoke about future plans for energy independence combined with energy efficiency for the UK, which means an extra £150 billion spend on energy. This, he says, equates to paying for an entire second NHS.
‘Cheap, low carbon, reliable energy must sit at the heart of any modern economy,’ he said. ‘Unless we act radically, we’ll bankrupt our economy and harm our planet.’ Hunt also said the Sizewell C nuclear power plant will work towards energy independence and provide jobs.
Jeremy Hunt said, ‘Putin’s war in Ukraine has caused wholesale gas and electricity prices to rise to eight times their historic average.’ He said the Government planned to lower energy bills and acknowledged that many are worried about the future.
October 17th announcement
The Energy Price Guarantee introduced by Liz Truss was set to last for two years but it was cut it back to six months to avoid exposing public finances to the unlimited volatility in international gas prices. In an announcement on October 17th, Hunt warned of ‘eye-wateringly difficult’ decisions, but that the priority will always be the most vulnerable.