Government 'can sort out' energy cost crisis says expert
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Under Prime Minister Liz Truss’ current energy plans, the wealthiest families in Britain could save thousands of pounds as their second homes are covered by the Government’s new energy price guarantee. Announced in the House of Commons last week, Ms Truss’s bills freeze will prevent Ofgem’s planned £3,549 price cap raise from coming into effect, slashing an expected £1,000 off household bills.
This scheme is set to be applied broadly to households across the country, which means that homeowners with additional properties and holiday let investors are also reportedly set to benefit from the scheme.
According to the Telegraph, the Government is believed to have decided against preventing second homes from reaping the benefits from this scheme over the concerns that such a plan would delay the rollout of the freeze while giving “minimal benefits”.
The new price guarantee scheme keeps household bills fixed by restricting the rates at which energy suppliers can charge customers for their energy usage, meaning that some households are still set to pay far more, or less than the £2,500 average annual bill.
Owners of holiday let properties generally face a much higher than average energy and water bills, as guests are less relaxed with usage, while owners have little control over limits to energy use.
Under the Government’s new guarantee, the owners of these types of properties who stayed on a variable tariff could end up saving thousands of pounds.
The Department for Business, Energy and Industrial Strategy has stated that homeowners with more than one property will not be at an advantage under the cap, because their final bill will still be based on how much energy the property uses.
Meanwhile, a leading think tank has also warned that the richest families could receive up to £4,700 in support on average, while the most vulnerable households may only get £2,200.
Resolution Foundation slammed Ms Truss’ plans for being “poorly targeted”, warning that it will come with an enormous price tag when taking the tax cuts she pledged to impose as part of her leadership campaign into consideration.
According to the think tank, the bill freeze, combined with cuts to national insurance will mean the richest households could receive £4,700 in support on average. Meanwhile, the poorest 10th will only receive around £2,200 on average.
The organisation argued that richer households are also set to benefit far more than the poorest families next year from the plans to reverse national insurance tax hikes slapped down in April.
Torsten Bell, the Resolution Foundation’s chief executive, said: “Last week, the prime minister announced a simply colossal energy support package to prevent a living standards catastrophe this winter.
“The support was big, bold and – together with announcements earlier this year – amounts to over £2,200 for every household in Britain.
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“Even so, families should still expect a tough winter ahead, with rich households getting twice as much cost-of-living support as poorer households next year.
“The energy price guarantee was absolutely the right thing to do in terms of providing support where it’s needed.
“But, by ruling out any attempt to fund it through further windfall taxes, the welcome support today could have a nasty sting in terms of higher mortgage payments and higher taxes tomorrow.”
Ms Truss has announced she will partly pay for her energy bills freeze plan with an increase in domestic gas supply through North Sea oil leases and a return to fracking
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