Hunt could use £11bn boost to cut £500 off family fuel bills

JEREMY Hunt is considering using an £11billion Budget windfall to scrap a £500 rise in energy bills this spring.

Energy Secretary Grant Shapps said the Chancellor was ‘very sympathetic’ to calls to protect households from the increase. A Treasury subsidy caps average bills at £2,500 a year – but this is due to rise to £3,000 a year from April 1.

The Institute for Fiscal Studies yesterday said that Mr Hunt might try to extend the cap until July, saving families hundreds of pounds.

Mr Shapps told The Times: ‘I completely recognise the argument over keeping that price guarantee in place, and the Chancellor and I are working very hard on it. I’m very sympathetic to making sure that we protect [people]. We’re looking at this very, very carefully.’

On a visit to Northern Ireland yesterday, Mr Sunak was questioned about the support on offer. ‘The Government is still continuing to cap energy bills,’ he replied. ‘That’s what the energy price guarantee is. It means that whatever happens, the Government is going to step in and cap the maximum that anyone will pay.

‘So that is a really big statement of support to everybody.’

Asked about Mr Shapps’ comments, the Prime Minister’s spokesman said: ‘All I would say on this is it’s something we are just keeping under review. I don’t think there’s a specific time we are working to.’

Lower energy prices caused by the warm European winter and a slowdown in China has saved the Treasury around £11billion, which otherwise would have been spent on subsidising household bills. Extending the price guarantee until June 30 would cost just £2.7billion.

Paul Johnson of the IFS said: ‘ The Chancellor could very easily ... extend the energy price guarantee for another three months to cushion people over the first part of the next fiscal year.’

The consumer campaigner Martin Lewis, and more than 80 charities, have urged the Chancellor to keep subsidies at their current level to prevent ‘ millions falling into fuel poverty’.

The Government has saved £31billion in the first ten months of the financial year, thanks to lower energy prices, a shallowerthan-expected recession and lower interest on Government debt. It is also expected to save £25billion in 2023/24.

Some Conservative MPs have said the windfall should go on tax cuts.

‘Millions falling into fuel poverty’