The government recognizes that people with household bills face “challenges,” said one minister when Tory politicians called on the prime minister to help those affected by energy poverty.
Around 20 Conservative MPs and colleagues wrote in the Sunday Telegraph asking Boris Johnson and Chancellor Rishi Sunak to lower VAT on energy bills and suspend the environmental tax in order to ease pressure on consumers as gas and electricity payments continue to fall Skyrocketing.
The letter was signed by politicians including Craig Mackinlay, chairman of the Net Zero Scrutiny Group of Conservative MPs, former Labor and Pensions Secretary Esther McVey, and Reps Robert Halfon and Steve Baker.
Health Secretary Ed Argar said the government had taken “a whole range of measures” including the Warm Home Discount, Household Assistance Fund and changes to the Universal Credit Taper to protect poor families and retirees from rising costs.
He told Times Radio that the economy is “recovering” after two challenging years.
“We’re seeing a large number of job vacancies so the economy is recovering, but we’re also realizing the challenges people face with household bills and living expenses,” he said.
“We are using a whole range of measures, targeted measures, to help people with the cost of living and important household bills.”
Conservative MP Robert Halfon, who was among the signatories to the letter to Mr Johnson, said the government was not responsible for the energy price hikes but insisted that more decisive action was needed.
“I am very concerned about the rising energy costs for hard working people across the country and they will continue to rise,” he told BBC Breakfast.
“This is not the government’s fault, it is because of international energy prices, and I firmly believe that given the price cap being raised this spring this year, the government should consider other measures.”
Green taxes make up “25% of our energy bills,” Halfon said, adding that he was not saying “get rid of them forever” but rather putting them on hold at a time when people might struggle when their bills skyrocket .
The letter to the Prime Minister argues that Britain is raising energy prices faster than any other country because of “taxes and environmental charges”.
“We hardly need to point out that high energy prices, be it for domestic heating or for house traffic, are most painfully felt by the least,” it says.
It argues that the elimination of VAT on energy bills and environmental taxes that fund renewable energy programs could save the average household £ 200 on their energy bills.
Trade association Energy UK said Ofgem and the government urgently need to consider “a number of potential measures” to deal with soaring bills.
A spokesman for the panel told the PA news agency: “Millions of households are currently protected by the energy price cap.
“However, with the cap due to increase in April, we understand that this can be a worrying time for many households.
“Suppliers have provided hundreds of millions of pounds in financial aid since the pandemic began, and the industry will continue that support this winter.
“However, in view of rising gas prices, providers can only do something to a certain extent – political and network costs, VAT and the pure gas purchase make up the majority of the bill.
“Given the magnitude of the hikes projected over the next year, Ofgem and the government need to look into a number of potential measures to cut bills enough to make a truly positive difference for customers.”
Adam Scorer, chairman of the board of the National Energy Action charity for energy poverty, said rising prices would be “quite disastrous for millions of households” to which the government had given no “adequate or significant response”.
Speaking to Sky News, Mr Scorer said the government needed to exempt the poorest people from paying high prices in the short term and better insulate houses as “the most important” long-term solution.
Greg Jackson, CEO of Octopus Energy, said vendors need to work together to “privately fund” solutions and the government needs to put in place a “mechanism in which (each supplier) must participate.”
He added that investing in renewable energy infrastructure would lower bills in the future.
“The more renewable energy we build, the better that social investment pays off,” Jackson told Times Radio.
“We are really on the threshold of energy bills falling annually. It sounds crazy because we are today.
“We need really strong measures in the short term to lower the current bills in order to make the energy manageable, and at the same time urgently start building these future systems so that they cannot be restarted.”
Suppliers like Good Energy and EDF have also urged the government to intervene after gas costs in wholesale markets rose more than 500% in less than a year.