What might Liz Truss do about soaring energy bills?
Assuming she becomes prime minister next week, Liz Truss and her potential chancellor, Kwasi Kwarteng, will be considering options to tackle the cost of living crisis, particularly for those paying high energy bills. Here we consider her possible moves.
Although people with relatively high incomes could struggle to pay their energy bills this winter, Truss has made clear that any support payments will be targeted to help the most vulnerable. Many such people are already in fuel poverty and struggling, and the price cap will shoot up by 80% in October. Truss has erred against universal “handouts”, and could focus on aiding pensioners and those receiving universal credit by extending the £650 being given to the 8m lowest-income households, and the £300 payment to a similar number of those who are retired.
A quick way of helping the most number of people would be to double the discount on domestic fuel bills. Beginning in October, £400 will be paid out across six instalments to about 29m households. Officials have been looking at increasing that, potentially to double the amount, because forecasts for price rises are considerably higher than when the initial support was put in place. This discount is easier to administer but a blunt instrument as more well-off households will benefit from the allowance.
A menu of tax cuts is Truss’ favoured route. She has already vowed to reverse the controversial National Insurance contributions rise, but could make this just apply to workers and leave the increase in place for businesses. The planned corporation tax rise, from 19% to 25%, from 2023, could also be pared back. Truss has also reportedly examined plans to cut VAT across the board, either reducing it from 20% to 15% or as low as
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