Hinckley and Bosworth's Liberal Democrats have called on the Government to spare families from soaring energy bills by cancelling October's price cap increase, accusing the Conservatives of "stalling in the face of a national emergency".
The bold plan would save a typical household in Hinckley and Bosworth an extra £1700 a year. Across Hinckley and Bosworth it would save residents £81million in fuel costs. The 70% increase in the energy price cap expected to be announced by Ofgem later this month would be cancelled, with the Government instead paying the shortfall to energy suppliers so that they can afford to supply customers at the current rates.
This would mean a total estimated saving for households in Hinckley and Bosworth of £1706 off their electricity and gas bills.
The Liberal Democrats say the estimated £36 billion cost should be met by expanding the windfall tax on oil and gas company profits, and using the Government's higher-than-expected VAT revenues as a result of soaring inflation.
The party is also calling for more targeted support for vulnerable and low income households. This would include doubling the Warm Homes Discount to £300 and extending it to all those on Universal Credit and Pension Credit, while investing in insulating fuel poor homes to bring prices down in the long term.
Liberal Democrat parliamentary spokesman for Hinckley and Bosworth Councillor Michael Mullaney said:
"Hard-working families in Hinckley and Bosworth are already struggling to make ends meet, and are deeply concerned about how they will cope with the predicted rise in energy bills.
"This Conservative Government is stalling in the face of a national emergency and, yet again, is simply not doing enough to put money back in the pockets of hard-working people.
"Countless families and pensioners across Hinckley and Bosworth are already struggling, and they cannot wait for a new Conservative leader to act.
"This is an emergency, and the Government must step in now to help families and pensioners in Hinckley and Bosworth by cancelling the planned rise in energy bills this October."
The price cap is currently £1,971 a year for a typical household. It went up by £693 (54%) in April. The new cap is expected to be around £3,400 - an increase of around £1,400 or 70%. Cancelling the rise would mean the energy bill for a typical household stays at £1,971 a year, instead of rising to around £3,400 in October.
The Liberal Democrats are calling for Ofgem not to increase the price cap. Instead, the Government would pay suppliers the shortfall of what they would've been charging if the cap had increased, so they can afford to continue supplying their customers.
We estimate that cancelling the rise would cost around £36 billion. This is based on Cornwall Insight's latest forecasts for the new price cap, and the number of electricity and gas meters in Great Britain. A proper Windfall Tax could raise around £20 billion to help keep people's energy bills from rising in October. Fossil fuel giants have seen their profits soar: BP and Shell made £29 billion in profits in the first six months of the year alone.
The Government should also use the extra VAT revenues it is receiving as a result of inflation. It took in £11 billion more in VAT last fiscal year (2021-22) than it was expecting in March 2021, and is now expected to take in an extra £9 billion this year and £10 billion next year compared to last year's forecasts. That's a £30 billion VAT windfall that the Government should be using to help families and pensioners.
The Liberal Democrats are also calling for additional help to support the most vulnerable households. This includes:
Reinstating the £20-a-week Universal Credit uplift and making it permanent, giving 4.7 million households extra help to keep their heating on.
Doubling the Warm Homes Discount and extending it to all those on Universal Credit and Pension Credit, to take £300 a year off the heating bills of around 7.5 million vulnerable and low income households.
Doubling the Winter Fuel Allowance, giving up to £600 a year to 11.3 million elderly pensioners to help with their heating bills.
An emergency home insulation programme to cut people's energy bills, starting with homes in or at risk of fuel poverty.
