Boris Johnson has announced he will set out an Energy Independence Plan in the “course of the next few days” as April price hike looms.
At Prime Minister’s Questions, Mr Johnson said his government “need to meet the long term impact of the energy price spike”.
The announcement came as the prime minister was pressed by Sir Keir Starmer to force the Treasury into a U-turn on government support for working families.
Live updates as PM probed on UK’s refugee policy
Last month the chancellor announced that the ‘vast majority’ of households will receive £350 of help to take the ‘sting’ out of rising energy bills.
Starmer calls for more support amid rising energy bills
“It is a total mess,” Sir Keir said of the financial assistance pledged for households amid rising household bills.
“The typical energy bill is going up by £700 next month and that’s because of pressures before Russia invaded Ukraine,” the Labour leader continued.
“The chancellor’s solution: a forced £200 loan for every household paid back in mandatory instalments over five years.
“The big gamble behind that policy was that energy costs would drop quickly after a short spike. That bet now looks certain to fail. When will the prime minister force the chancellor into a U-turn?”
Calling for a Windfall Tax on the excess profits of North Sea oil and gas companies, the Labour leader accused the government of “putting energy profits before working people”.
PMQs returns to tradition after rare period of unity
After a fortnight of rare parliamentary unity over the Ukraine crisis, today PMQs returned to its scrappy brawling traditions.
Sir Keir Starmer surprised some by avoiding the topic that has being riling Tory MPs: visas for Ukrainian refugees.
Instead he returned to the cost of living crisis and rising energy bills, a topic Labour believe their voters are increasingly concerned about.
Sir Keir called for the PM to get his chancellor to U-turn on the “total mess” of their support for working families.
The PM attacked Labour’s own record in government (much to the incredulity of opposition backbenchers as the party left office 12 years ago), and hailed what he claimed was a new pro-nuclear policy from Sir Keir.
Conservatives greeted the SNP’s Ian Blackford with a chorus of groans, but he soon wiped smiles off faces by asking about the UK government’s refugee response, which he says is the “slowest, most bureaucratic and incompetent in Europe”.
The PM defended his home secretary (who was not present in the chamber) – yet we know in the privacy of yesterday’s cabinet meeting, ministerial colleagues made Priti Patel “squirm” as they “drilled down into the detail” of her beleaguered visas policy.
Expect a cross-government effort in the coming days to help Ukrainians fleeing war.
Mr Johnson knows he has bolstered his government’s reputation with his response to this crisis, and the mess over visas is his biggest weakness.
PM confirms energy plan will be revealed in ‘next few days’
Mr Johnson replied that his government has issued a £20bn package of support to help families amid rising costs and “will continue to do more”.
“I think a U-turn is the last thing people want,” he added.
Read more: Cost of living squeeze set to intensify
The PM continued: “The chancellor has set out plans to help families with energy costs with unprecedented measures to abate council tax by £150 in addition to all the other schemes that we are putting forward.”
He added that Sir Keir is “absolutely right” that ministers “need to meet the long-term impacts of the spike in energy prices”, adding that he will be “setting out an energy independence plan for this country in the course of the next few days to ensure that we undo some of the damage of previous decisions taken”.
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Cost of living protests across UK
Starmer calls for Windfall Tax on companies’ profits
Pressing once more for more government support to help decrease household bills, Sir Keir said: “Before Russia invaded Ukraine, North Sea oil and gas companies were making bumper profits. BP made £9.5 billion, Shell made £14 billion.
“In their own words, more money than they know what to do with.
“Since then the international price of oil and gas has skyrocketed and so will their profits.
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Calls for energy windfall tax
Read more: Russian invasion sends gas prices soaring
“When will the prime minister admit he has got this badly wrong, put a windfall tax on those super profits and use the money to cut household energy bills?”
The PM replied that he wants to “take a sober, responsible approach and end our dependence on hydrocarbon altogether – particularly Russian hydrocarbon”.
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War pushes energy prices up further
Energy prices spike amid conflict
The PM also warned MPs: “The House should be in no doubt that the pressures on energy will continue.”
Since the outbreak of war in Ukraine, wholesale energy prices have spiked to record levels, with the cost of natural gas for next-day delivery in the UK trading 10% higher today at 515p per therm – more than ten times the level of a year ago.
Suppliers have been forced to raise prices for consumers, with the industry price cap set by the regulator, Ofgem, rising 50% from April.
Read more: What is the energy price cap and why will bills rise so sharply?
The surge threatens to present Mr Johnson’s government with a seemingly intractable cost-of-living challenge, given the volume of other inflationary pressures affecting consumers in supermarkets and at the petrol pump.
This week, Bulb – the UK’s seventh biggest supplier – took the total number of energy firms which have collapsed since August to nearly 30.
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Average energy bills to go up by 54%
Govt offering £350 rebate to help pay bills
Last month the chancellor announced that the “vast majority” of households will receive £350 of help to take the “sting” out of rising energy bills.
Rishi Sunak said 80% of all homes in England will get a £150 discount on their council tax bill in April, while all domestic electricity customers will get £200 in October off their energy bills.
The latter amount will be repaid over five years, starting from next April, although the council tax rebate will not need to be paid back.
This is aimed at limiting the effect of price rises in April, but the money will be recouped from consumers in the following years in equal £40 instalments so the loans can be paid back as energy prices fall.
Households in council tax bands A, B, C and D will be given a rebate funded by government grants.
Councils will also be given almost £150m to help lower income households who live in higher council tax properties and households in bands A to D who are exempt from paying council tax.