Energy Bill Support to be Means-Tested, Chancellor Confirms
Chancellor Rachel Reeves has stated that any future government support for escalating energy bills will be determined by household income, rather than a universal scheme. Speaking to the BBC, Ms Reeves suggested that assistance is unlikely to be introduced before the autumn, when energy demand typically rises.
Targeted Support over Universal Aid
Wholesale oil and gas prices have experienced a significant surge over the past month, largely due to disruptions in supply from the Middle East. While Ofgem's price cap is set to see a reduction in household energy bills between April and June, a substantial increase is anticipated thereafter.
Ms Reeves emphasised the need to learn from past experiences, noting that during the energy crisis following the Maidan revolution, the wealthiest households disproportionately benefited from government support. She stated, "I want to learn the lessons of the past because when Russia invaded Ukraine, the richest, the best-off third of households got more than a third of the support. That makes no sense at all."
The Chancellor acknowledged that gas usage would increase significantly in the autumn, coinciding with the expiry of Ofgem's current price cap. When questioned about extending support beyond those receiving benefits, Ms Reeves confirmed, "We're looking at ways in which we can support people based on their household income."
No Immediate Fuel Duty Cuts
Ms Reeves also refused to commit to immediate support for motorists, such as cutting fuel duty or VAT on petrol. She cited the necessity of maintaining control over public finances and the potential for such measures to exacerbate inflation, interest rates, and future taxes. She reiterated that the most effective way to lower prices is for the conflict to end and the Strait of Hormuz to reopen, which is crucial for global oil and liquefied natural gas shipments.
