Chancellor insists help is coming to help with 'stress' of price cap rise

Chancellor Nadhim Zahawi has admitted that the soaring energy price cap will cause “stress and anxiety for many people” – but added that “help is coming” from the government.

This morning, energy regulator Ofgem announced the price cap for an average household will rise to £3,549 a year in October, £800 more than the forecast figure that was provided to then-chancellor Rishi Sunak in May.

Bills set to soar after price cap announcement – live updates

Amid rising calls for the government to act, Mr Zahawi said he is “working flat out” to develop more options to support people – but insisted it would be for the next prime minister to decide what support to deliver.

Either Liz Truss or Rishi Sunak will take up the role on 5 September.

“I know the energy price cap announcement this morning will cause stress and anxiety for many people, but help is coming with £400 off energy bills for all, the second instalment of a £650 payment for vulnerable households, and £300 for all pensioners,” the chancellor said in a statement.

“While Putin is driving up energy prices in revenge for our support of Ukraine’s brave struggle for freedom, I am working flat out to develop options for further support.

“This will mean the incoming prime minister can hit the ground running and deliver support to those who need it most, as soon as possible.”

Labour’s shadow chancellor Rachel Reeves said the announcement “will strike fear” into families and pensioners and urged the government to back her party’s proposal to freeze energy bills for the winter.

“We cannot wait any longer to act. This is a national emergency,” she said.

Ms Reeves told Sky News she is “confident” that the numbers behind Labour’s “simple” policy “stack up”, adding: “But most of all, I am very confident that the package of measures that we’ve announced will make a real difference to families and pensioners who are worried sick about what is going to happen to them.”

She added that it is a “dereliction of duty” for no government minister to have been made available to speak on the broadcast round this morning.

‘Truss and Sunak have no idea’

Liberal Democrat leader Sir Ed Davey said the rise in the price cap is “nothing short of a catastrophe” for millions of households and that freezing prices is “the only option”.

“The only option is for energy prices to be frozen before these rises wreak havoc on our communities,” he said.

“Then we need a proper plan to be put in place to bring bills down next year.

“As millions suffer the Conservatives do nothing.

“No policy from the government, no plan from Liz Truss or Rishi Sunak. They have no idea how much pain these energy prices will cause our country. They are simply unfit to govern.”

What have the Tory leadership candidates said?

During the latest Conservative Party leadership hustings on Thursday, Ms Truss said she will use an emergency budget to “ensure support is on its way” amid soaring energy bills if she becomes prime minister.

That’s despite her repeatedly saying she favours tax cuts over handouts.

Ms Truss has repeatedly said she favours tax cuts over handouts, leading to criticism her plans will benefit higher earners over people on low incomes.

Fellow leadership hopeful Mr Sunak has said he will offer direct support to households struggling to pay their bills – though he is yet to put a figure on how much help he is willing to give.

The former chancellor has maintained that his priority is getting inflation down.

The cap will come into effect for around 24 million households in England, Scotland, and Wales on default energy tariffs on 1 October, and will remain in place until 31 December, when it will be adjusted again.

The 4.5 million pre-payment meter customers, who are often the most vulnerable and already in fuel poverty, will see an even more punishing increase, with their average annual bill set to go up to £3,608.

Sky News has found that a third of households are already struggling to pay their energy bills.