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Tory rivals under growing pressure to freeze energy price cap

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Conservative leadership candidates came under mounting pressure on Sunday to flesh out plans to tackle rising energy bills, with mounting calls for a way to freeze the amount households pay.

Sir Keir Starmer, leader of the opposition Labor Party, and some of the UK’s biggest energy suppliers have put forward separate plans to bring the typical household bill below £2,000 as concerns grow that runaway gas – and electricity prices could plunge millions of families into poverty and trigger a deep recession.

The energy crisis is now a “national emergency,” the Labor leader said, adding that the Conservative leadership “had not prepared and refused to invest” in the sector. Starmer said his party’s plan would save the average family £1,000, bring energy costs under control and help tackle inflation. It would be funded through initiatives including increased taxes on the revenues of oil and gas companies.

Ofgem, the energy regulator, has set the current annual cap, which limits the rates energy suppliers can charge customers for their standard rates, at £1,971 for the typical home. But it is set to announce a new fall cap later this month, with the price expected to rise to over £4,400 by April next year and some consultancies predict it could rise to around £5,000 as wholesale gas prices continue. to rise.

Starmer’s intervention echoed opposition calls Liberal Democrats to cancel the incoming energy price hike in October.

During the weekend, 70 charities across the UK, including the Joseph Rowntree Foundation, described rising energy prices as a “national emergency” and urged Tory leadership candidates Liz Truss and Rishi Sunak to “show the compassion and leadership needed” to overcome the crisis of address the cost of living.

Truss has rejected the imposition of a new windfall tax, arguing that tax cuts and other measures, such as a temporary moratorium on green energy taxes, would lower the cost of fuel bills for families.

Meanwhile, Sunak has pledged that if elected, he will “make a national effort” to increase domestic energy supplies and reduce energy waste, and establish a new energy security task force.

Some of the UK’s largest gas and electricity suppliers have also suggested that more government aid will be needed for households.

Last week Prime Minister Boris Johnson admitted that the government’s existing £37bn cost of living package this autumn may not be enough to support ailing households, but Downing Street said the government had no plans to introduce significant fiscal measures. until a successor to Johnson is announced on Sept.

Scottish Power has revived a proposal to limit typical household bills below £2,000, with the rest being paid for through a combination of government-blocked loans. It would eventually be repaid over the next decade, either by being added to customers’ accounts or by being included in general taxation.

The Financial Times reported on Saturday that energy suppliers, including Centrica – owner of the UK’s largest domestic supplier, British Gas – Octopus Energy and Eon – have proposed shifting a range of charges on accounts in general taxation.

These include costs related to support for poorer households, VAT and environmental taxes, which Eon estimates could take at least £420 off the bills from October.

Electricity producers – including some of the largest household suppliers who have different interests in renewable projects, nuclear plants or gas fields – fear they too could be the target of a windfall beyond oil and gas. Some renewable and nuclear projects have generated much higher revenues without significantly increasing their costs.

“We know that rising prices, driven by global challenges, affect how far people’s incomes go, which is why we have taken ongoing action to help households by gradually raising £37bn in aid throughout the year” the Treasury said.