Liz Truss has doubled down on her refusal to offer significant help to people with soaring energy bills this winter, despite a forecast that these could exceed £4,200 annually from January, and rise further during 2023.
Truss, the runaway favourite to succeed Boris Johnson as prime minister next month, has already said she does not want to give “handouts” to people struggling with bills, preferring to prioritise tax cuts.
While she has not definitively ruled out other direct help, when questioned on Tuesday the foreign secretary would only confirm plans to reverse the recent increase in national insurance, and to temporarily suspend green levies on energy bills.
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.”
Earlier on Tuesday, the Cornwall Insight consultancy said it expected the energy price cap, the maximum amount suppliers can charge for each unit of energy, would rise so average annual bills would reach £4,266 a year for the first three months of 2023, rising to £4,426 in the second quarter.
The consultancy expects the cap to hit £3,582 from October, an increase of £200 on its last forecast. The cap is now being updated every three months, rather than six, as previously.
Truss’s insistence on tax cuts rather than other forms of help for households has become a major dividing line in the leadership race.
A spokesperson for the campaign of her rival, former chancellor Rishi Sunak, said Truss was “divorced from reality” on the issue, adding: “Liz’s plan will not touch the sides for the majority of British families this winter and pensioners will get no help whatsoever.”
In an article for the Times on Tuesday, Dominic Raab, the justice secretary and deputy PM, who is backing Sunak, said that for Truss to produce an emergency budget in September that did not properly face up to the scale of the energy crisis would amount to “an electoral suicide note” for the Conservatives.
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 Boris Johnson took onboard 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, a regular critic of Keir Starmer, has set up a campaign called Enough is Enough to seek more action on the cost of living, and also argued the party should support unions striking for higher pay.
Pressed about her plans in Huddersfield, Truss repeatedly refused to commit to any help beyond the NI reversal and the green levy suspension, saying: “I’m not going to comment on exactly what’s going to be in the budget. What I am clear about is that from day one I will reduce taxes.”
Asked about Raab’s comments, she said: “What I care about is Britain being successful. I don’t agree with these portents of doom. I don’t agree with this declinist talk.
“I believe our country’s best days are ahead of us. What I’m going to do, if selected as prime minister, is keep taxes low, get the economy growing, unleash the potential right across Britain. That’s what I’m about.”
