Grant Shapps has suggested it is unlikely the government will step in to protect households from rising energy bills this winter.
The energy secretary said in an interview with the Times that once inflation had fallen the government would “absolutely” need to cut taxes.
But he said it was unlikely the government would be able to shield people from steep energy bill rises with a price guarantee.
The government introduced an energy price guarantee last year, which kept the average dual-fuel energy bill at £2,500 a year over the winter.
The scheme came to an end in June, after the government postponed a cut in support that would have ended in April. A separate support scheme that paid about £400 a household from October last year, also came to an end last month.
Shapps said: “We don’t want to be in a position … of having to constantly pay energy bills.
“We’re having to tax people in order to pay it back to people … that money doesn’t come from nowhere.”
Shapps’s remarks come after the Bank of England raised interest rates for the 14th consecutive time to 5.25% while warning businesses and households that the cost of borrowing would remain high for at least the next two years.
Rishi Sunak, who has vowed to halve inflation by the year’s end, has come under increased pressure from Conservative MPs to boost the UK’s struggling economy and lower high inflation rates.
Shapps said: “You need to sort out the macro picture, get growth into the economy, bring down inflation and deal with the longer-term debt. Once you’ve done that you can set your path to lower taxes.
“We absolutely need to show that we understand the future for people in this country is to be a lower-taxed economy. Absolutely it’s in our DNA, in our heart, it’s in the prime minister’s heart as well.”
Analysts and energy firms have said stubbornly high energy bills are here to stay for the coming winter.
Earlier this week, the government announced 100-plus new drilling licences to extract as much oil and gas from the North Sea in a “maxing out policy”, a move which the prime minister described as being significantly more efficient than shipping gas and oil from other countries.
The announcement prompted concern from industry experts that the plans would “send a wrecking ball” through the UK’s climate commitments and led 100 energy firms to voice worries about the country’s over-reliance on gas and diversion from the country’s green agenda.
Labour has pledged to block all new domestic oil and gas developments and proposed heavy investments in renewable sources, such as wind and nuclear power, should the party win the next election. Shapps called the plans the “most absurd Just Stop Oil rent-a-policy I’ve ever heard”.
Source : The Guardian
