Cost of living: Three tips to save money on energy bills
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Last month, the Government committed to a two-year £2,500 energy price guarantee for households with average gas and electricity usage. However, with Mr Hunt taking over from the former Chancellor Kwasi Kwarteng, this energy bill support is now set to last until April 2023. In light of this, Jeremy Hunt is being reminded that further financial assistance will be needed even after the price guarantee comes to an end.
Speaking exclusively to Express.co.uk, consumer expert Will Hodson shared his thoughts on the Government’s most recent U-turn.
Mr Hodson said: “For me, it wasn’t a huge surprise because with Jeremy Hunt becoming Chancellor, we’re setting out on a very different economic path.
“It’s a path which is aiming to be more restrained and more prudent. Now, when the energy price guarantee was announced the initial reaction from lots of people was pretty positive but the problems were always plain to see.
“The problem is it is universal, not well targeted and exposes the British taxpayer to potentially unlimited amounts of money, depending on how high gas prices go to cover bills across the UK for two years.
“The energy price guarantee really amounted to the Government paying almost half of everyone’s energy bill in the country for two years.
“This meant that it was going to be giving twice as much money to millionaires in Mayfair’s mansions, as it would have been to people who really needed the support most but who were in smaller properties with lower bills.
“That was morally wrong and it doesn’t surprise me that that’s going to be revised with a more targeted approach. But we should leave that as a challenge facing Jeremy Hunt.”
Mr Hodson also highlighted the expense of the energy price guarantee on the taxpayer and the “sheer size” of the Government’s commitment to subsidise gas and electricity bills for two years.
According to the expert, investment in insulating homes and improving the country’s energy efficiency is crucial to bringing down bills long-term.
He added: “There’s a huge difference between subsidising bills, which is what the Government was doing, and actually reducing them.
“Britain has the oldest housing stock in Western Europe. It is inevitable that we have to invest, as other countries have invested in making our homes ready for a future of high energy prices, and extreme weather.
“Every year that we delay, that investment is a year where the investment required probably gets bigger. and savings inevitably generated are squandered for another year.”
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For Mr Hodson, targeted financial support to the UK’s most vulnerable population is needed following the price guarantee’s end in April.
He explained: “This is probably the thorniest problem facing Jeremy Hunt because it’s clear that after April. People will still need support for bills that could be as high as 4000 or 5000 pounds a year.
“Targeting people who qualify for means-tested benefits is the most obvious one.
“But unfortunately, a lot of people who are in desperate conditions are also in work so relying on benefits would be quite unjust, if excluded those people who needed it and worked.
“People have talked about a tiered pricing system so for the first 1000 units you use per year might come at a reduced price. Then the price increases, the more you use.
“But that assumes that people who use the most energy are always the better off and people who use the least are always the worst off. That assumption is not necessarily correct.
“The truth is, we don’t have the answers yet. By April, Jeremy Hunt will have to find a way along with energy companies to identify those households who most need the support, and it’s going to boil down to their financial need rather than their energy usage.”
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