Hunt warms to three more months of energy bill help

THE £2,500 energy price guarantee is set to be extended for another three months to avoid a price rise affecting millions of households this April.

Jeremy Hunt, the Chancellor, is preparing to announce the move in his Budget on March 15 after accepting arguments about the effect on families under the current plans.

The energy price guarantee was meant to increase from £2,500 to £3,000 at the start of April but that rise is expected to be pushed back to the start of July. It will cost the Treasury around £3billion and follows a campaign by Martin Lewis, the self-dubbed “money saving expert”, for action.

The move is being prepared to avoid unintended consequences from the original plan. Energy prices have been falling since the winter and are expected to drop below the Government’s cap later this year, meaning it will effectively be redundant.

But the crossover point is not forecast to happen until the summer, meaning households were still going to have to pay more in the three months ahead.

Energy companies have been told to prepare for the announcement, given that some had to decide what prices to adopt in April in recent days.

The move means that there will be less money for the Treasury available for other measures being considered for the Budget.

A vocal group of Tory backbenchers have been lobbying for tax cuts in recent weeks, with the clash set to become more stark in the run-up to the announcements.

Martin Lewis told BBC Radio Four’s Today programme: “I’m hearing they have not been told that the rate is staying. They have been told that there is an attempt to keep the rate at £2,500.

“So we’re not at the smoking gun stage that this is definitely happening, but I would say we’re at an 85 per cent likelihood that the price won’t be going up.”