Brits face crippling £5k energy bills after Hunt rips up mini-Budget and u-turns on energy price guarantee
18 October 2022, 9:22
Brits could face energy bills of up to £5,000 from April after Jeremy Hunt ripped up Liz Truss' mini-Budget in a bid to get markets back on track.
The new Chancellor said the energy price guarantee - which limits average energy bills to £2,500 - would come to an end in April, despite initially being planned to last two years.
Support will instead be targeted at the vulnerable, meaning crippling energy bills could almost double for most families.
A Treasury-led review will take place "whilst ensuring enough support for those in need", Mr Hunt said.
A price cap for April is still yet to be set by energy regulator Ofgem, but consultancy Auxilione has forecast that average bills could hit £5,078.
Meanwhile, RBC Capital Markets predicted £4,684 a year.
It comes after National Grid chief executive John Pettigrew warned that there could be three-hour blackouts between 4pm to 7pm throughout winter.
He said the firm may need to introduce rolling power cuts in January and February, specifying that they would only occur on "really, really cold days" during the week should Britain fail to secure enough gas supplies from Europe.
Speaking at the Financial Times's Energy Transition Summit he said: "In the context of the terrible things that are going on in the Ukraine and the consequences of that [it was] right that we set out what some of the potential risks could be."
A government spokesperson said: "The UK has a secure and diverse energy system.
"To strengthen this position further, we have put plans in place to secure supply and National Grid, working alongside energy suppliers and Ofgem, will launch a voluntary service to reward users who reduce demand at peak times."
Mr Hunt announced on Monday that he would be U-turning £32 billion worth of tax cuts in a bid to get the markets back on track.
It included the 1p cut to basic rate of income tax, which has been shelved "indefinitely".
However, the Institute for Fiscal Studies said the changes were not enough to balance the books in the medium term, with the Chancellor expected to announce more tax rises and spending cuts as part of his fiscal statement at the end of the month.
He warned that the government was being forced to make "eye-wateringly difficult" decisions.
A further windfall tax on oil and gas companies is among the changes expected, it is understood.
Following the initial announcement, by previous Chancellor Kwasi Kwarteng, UK markets faced financial turmoil, with the pound plummeting to a 37-year low.
Ms Truss admitted on Monday evening that she had gone "too far and too fast" and apologised to the British public for the policies that have wreaked havoc in the British economy.
"First of all, I do want to accept responsibility and say sorry for the mistakes that have been made," the PM told the BBC.
"I wanted to act, to help people with their energy bills, to deal with the issue of high taxes, but we went too far and too fast.
"I have acknowledged that. I have put in place a new Chancellor with a new strategy to restore economic stability.
"Now what I am focused on is delivering for the public."