Jeremy Hunt has abandoned the government’s commitment to protect all customers from increased energy bills beyond this winter.
In her first announcement as prime minister, Liz Truss unveiled the Energy Price Guarantee (EPG), which was designed to cap the typical annual household energy bills for the next two years at around £2,500.
The same package offered “equivalent” protection until April to all business, charities and public sector organisations from energy costs this winter.
However, in his emergency fiscal statement, the new chancellor of the exchequer announced in a shock move that universal support for billpayers will only be available until April next year.
He also announced a Treasury-led review will be launched to consider how to offer more targeted support to households and businesses with energy bills after April 2023.
The objective of the review is to design a new approach that will “cost the taxpayer significantly less than planned whilst ensuring enough support for those in need”.
Hunt added that future support for businesses will be targeted at those most affected and that the new approach will be designed to offer better incentives to encourage energy efficiency.
The chancellor, who was appointed as Kwasi Kwarteng’s replacement on Friday following the latter’s sacking in the wake of his botched “mini-Budget”, said Truss had agreed it would be “irresponsible” for the government to continue exposing the public finances to “unlimited volatility” in international gas prices by offering open-ended support to customers.
He said: “The objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.”
The chancellor has also said that the £400 of support for households via his predecessor but two Rishi Sunak’s Energy Bill Support Scheme will also be maintained.
The announcement on the EPG is part of a wider backtrack by Hunt on the bulk of Kwarteng’s mini-Budget.