Householders have been warned that energy bills could rise to £4,000 a year from April after Chancellor Jeremy Hunt scrapped the energy price guarantee. The guarantee, which caps the average family energy bill at £2,500 a year, was due to be in force for two years.
But scrapping almost everything announced by former Chancellor Kwasi Kwarteng three weeks ago, Mr Hunt yesterday said the guarantee will now end in April. The Resolution Foundation think tank warned that could mean even middle-income families unable to pay for gas and electricity.
Chief executive Torsten Bell said on BBC Radio 4’s Today programme: “It’s a big deal, if he (Chancellor Jeremy Hunt) did scrap all of that he’s saving up to £40 billion, but it’s a big deal for households too because our bills are due to hit £4,000 in April.
“I think really £4,000 is so large that even middle-income households won’t be able to afford those bills next year.
“So he’s done the easy bit, scrapping the existing scheme, what he’s got to do is some hard work about how he intends to provide support for lower and middle-income households next year.”
At the same time, spending cuts in areas such as health and education could be as deep as those after the 2009 financial crisis as there is a fiscal black hole of around £30 billion even after the Government scrapped nearly all of its mini-budget.
“These a big numbers. If we are talking of spending cuts between £30-40 billion then they’re not that far off the scale of the cuts announced by George Osborne back in 2010,” Mr Bell said.
