Prime Minister Andy Burnham has admitted the UK faces another energy crisis this winter, as household bills are predicted to rise by £276 in January. He said there is not a “huge room for manoeuvre” when it comes to tackling the cost of living.
Asked whether people should “expect to be better-off” after next month’s Budget, Burnham told BBC Breakfast: “We’re thinking all of the time, ‘how do we take a bit of pressure off people, give them some breathing space?’ It’s why one of the first decisions I took as Prime Minister was to remove VAT off electricity bills, and that will happen on Thursday.”
Prime Minister defends VAT cut as 'something, not everything'
Burnham said the measure was “something, it’s not everything”, but added he is considering “everything that might help people in very difficult times”.
He continued: “We’ll do something to help people with bus fares next year, the £2 cap for the whole of the year, and then in the Budget we will consider further measures. It’s important for me to say that we don’t have huge room for manoeuvre. I think people can see that when they look at the financial picture, but within that we will do our best, and we’ll also try to support people who are struggling with the cost of doing business ’cause it’s hard to run a business right now as well.”
Energy bills set to soar in January
Household energy prices are set to soar in January, with a typical annual bill predicted to climb by £276, the BBC reports. The forecasted 16% increase would hit millions of households at the coldest time of year, marking the biggest rise in bills for four years.
The predicted increase from consultancy Cornwall Insight comes as prices are already set to go up by £60 a year under regulator Ofgem's October price cap. The increase from tomorrow will see the energy bill for the average household paying by direct debit for gas and electricity reach £1,723 - putting increased pressure on the government to help those who will struggle to pay.
Burnham acknowledges 'second significant energy crisis'
The Prime Minister told the BBC he doesn't think it is “an overstatement” to say we face another energy crisis this winter amid the additional January spike. The boss of energy supplier EDF, Simone Rossi, warned the UK is “walking into a second significant energy crisis after the one we experienced just four years ago”.
Burnham said to the Radio 4 Today programme: “I don't think that is an overstatement to be honest.” He added that when he looks at “prices at the pump” it is “very challenging for people who are filling up today” and energy prices for homes.
Burnham also said he is considering “every possible measure” to cut the cost of driving, when faced with questions about whether he will stop a planned fuel duty rise next year. He said: “I’m considering everything that might help people in very difficult times and I will be honest and say every possible measure is being looked at. The question I’ve got is, ‘how many can I afford?’ What can we do given the state of the public finances? And people wouldn’t thank me for making unfunded payments that then cause pressure on mortgages – and we’ve seen that in the past and we’re not going back there.”
Burnham later added: “We will work hard to take that pressure off people’s shoulders. But I would be the first to say it’s hard – and the long-term answer is to put water under stronger public control – energy, housing reform, those are the long-term answers.”
