The government’s flagship energy plan, including the Energy Price Guarantee and the Energy Bill Relief Scheme, will remain in place until April next year instead of two years as was initially planned.

This is part of medium-term fiscal plan measures announced earlier by the new Chancellor, Jeremy Hunt. 

The Prime Minister and the Chancellor have agreed that it would be “irresponsible” for the government to “continue exposing the public finances to unlimited volatility in international gas prices”.

Mr Hunt said a Treasury-led review would be launched to examine different options to support households and businesses with energy bills after April 2o23.

He said: “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”.

The Chancellor also said that any support for businesses will be targeted to those most affected and that the new approach will better incentivise energy efficiency.

In response to the announcement, Liz Truss said: “The British people rightly want stability, which is why we are addressing the serious challenges we face in worsening economic conditions.

“We have taken action to chart a new course for growth that supports and delivers for people across the UK.”

Martin Lewis, Founder of the Money Saving Expert, said: “While energy intervention was desperately needed – a universal energy price guarantee was always expensive and poorly targeted.

“The post-April support will still need to reach a decent way up the net and support middle earners, energy rates are still huge.”

Commenting on the Chancellor’s statement on energy bills, Tessa Khan, Director of Uplift, said: “The government must not waver on its commitment to support those who, without financial support, will be forced into impossible choices this winter, such as between heating and eating.

“Seven million households will still be in fuel poverty even with the current level of support and must be properly protected.

“But there is now, finally, recognition that Liz Truss’ original energy plan is wrongheaded and urgently needs rewriting.

“It must now include measures to cut energy waste through, for example, a national insulation programme, which could save households and the Treasury billions. It must go full throttle into renewables, which are now many times cheaper than UK gas, rather than blocking them for ideological reasons.”

National Energy Action Chief Executive Adam Scorer said: “This is an almighty trade-off. In seeking the confidence of markets, the government has created huge uncertainty for households.

“Everyone knows why decisions have been made at breakneck speed, but there are questions that need to be answered and answered quickly.

“Who will still get support? Will it include vulnerable households, not on welfare benefits? Will that support be deeper for those in greatest need? What do they mean by incentivising energy efficiency?

“Households on the lowest incomes are already rationing their energy usage to dangerous levels. £2,500 is beyond their means.

“Many vulnerable people were holding on by their fingertips. Government has to be very, very careful it doesn’t prise them away.”

Article source: https://www.energylivenews.com/2022/10/17/government-scales-back-energy-plan/