Boris Johnson has waded into the Tory leadership row over energy costs by declaring he is “absolutely certain” his successor will offer further help to households, as annual bills were forecast to top £4,200 by January.
Johnson made an unexpected intervention on energy bills at a No 10 reception, as Liz Truss, the frontrunner to be the next prime minister, was accused by Rishi Sunak’s campaign of being divorced from reality over her refusal to commit to more “handouts”.
Johnson has repeatedly refused to act on rocketing gas and electricity bills before leaving office on 5 September, but said he was sure the next prime minister “will be wanting to make some more announcements in September/October about what we’re going to do further to help people in the next period in December/January”.
He added: “I just want you to know that I’m absolutely confident that we will have the fiscal firepower and the headroom to continue to look after people as we’ve done throughout.”
The deepening row over how to help households came on the day annual energy bills were forecast to top £4,200 from January, triggering a warning that Britons face “serious hardship on a massive scale” without government intervention.
At the same time, government sources admitted officials had modelled the possibility of a four-day power shortage in the first quarter of next year, potentially requiring rolling blackouts for industry and households.
Johnson’s comments add further pressure on Truss to acknowledge that, as prime minister, she would need to give households more help beyond tax cuts.
As Truss doubled down on her plan for reversing the national insurance rise and removing £150 of green levies, a Sunak campaign spokesperson said her proposals “will not touch the sides for the majority of British families this winter and pensioners will get no help whatsoever”.
The consultancy Cornwall Insight said on Tuesday that it expected the energy price cap to reach £4,266 a year for the first three months of next year – more than triple the level it was at a year previously and more than double the current level.
Any shortages of energy over the winter caused by less gas and electricity from Norway and the rest of Europe could push prices up even further.
But Truss said at the weekend that she does not want to give “handouts” to people struggling with bills, preferring to prioritise tax cuts. She repeatedly refused to promise any further help on energy bills on Tuesday, only confirming plans to reverse the recent increase in national insurance, and to temporarily suspend green levies on energy bills.
Truss doubled down on her economic stance on Tuesday night by branding cash handouts to help with the cost of living as “Gordon Brown economics”.
Speaking at the Conservative hustings in Darlington, which was dominated by questions on bills, the foreign secretary underlined that she believed the best route to help with the cost of living was cutting taxes, starting with national insurance. “I didn’t agree with raising national insurance. We promised not to do it in our manifesto and we need to help those people who are struggling with the cost of living.
“We need to be on the side of the self-employed. We need to be on the side of people who work and do the right thing and we need to enable people to keep more of their own money. Those are Conservative principles.
“What I don’t support is taking money off people in tax and then giving it back to them in handouts. That to me is Gordon Brown economics.”
Sunak, in turn, warned that the British people “will not forgive us” if vulnerable households did not get extra direct help this winter.
The former chancellor said Truss’s plans would not help swaths of the population and said that whoever was prime minister should not rule out direct support. Truss has said she will emphasis tax cuts rather than committing to giving extra direct help with energy bills.
“If you’re a pensioner, if you’re on the “national living wage” tax cuts are worth zero,” the former chancellor said. “That’s not a policy to help people get through the winter and I think it’s wrong to rule out help directly because we as a Conservative government have an obligation to help those who are most vulnerable.
“If we don’t do that, not only will people suffer but we will get absolutely hammered when it comes to the next election. The British people will not forgive us for not doing that.”
Critics of her policy warn that tax cuts disproportionately help the better off and offer no assistance to pensioners or those not in work, while the green levies contribute only about £150 annually to the average bill.
“What’s vitally important at this moment is we get economic growth going,” Truss told reporters on a visit to Huddersfield in West Yorkshire.
“At the moment we’ve got the highest taxes in 70 years. That’s why I believe in lower taxes, to get growth going, to encourage businesses to invest, and that way there will be more money in people’s pockets.”
Asked if she was ruling out any other help for energy bills, Truss replied: “What I’m promising is that from day one, people will have lower taxes. They will also have lower energy bills, because I’m going to put a temporary moratorium on the green energy levy. But what we need is a growing economy.”
Meanwhile, Sunak confirmed in an interview with ITV that he would be likely to offer “a few hundreds” of pounds in rebates on energy bills after the rise is confirmed.
On Monday, the Liberal Democrats called for an “energy furlough scheme” in which the government financed the complete cost of any rise to the energy price cap in October.
While Labour has said it would provide extra assistance to households, financed by ending tax breaks for energy firms, one of the party’s backbenchers has argued it should go much further.
In an article for the Guardian, Zarah Sultana said that since Johnson took on board Labour’s idea for a windfall tax on energy firms in May, her party “isn’t offering enough” to people struggling with bills. The Coventry South MP has set up a campaign called Enough is Enough to seek more action on the cost of living.
