Kwasi Kwarteng defends Government’s cost of living support package
Government CANNOT shield people ‘100 per cent’ from spiking fuel prices, Kwasi Kwarteng says as he rules out cutting VAT on energy bills and defends Rishi Sunak’s cost of living support package
Kwasi Kwarteng said the Government is trying to ‘shield’ families from price risesBut ministers cannot protect people ‘100 per cent’ from spiking cost of energyHe defended Rishi Sunak’s support package and effectively ruled out VAT cut
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The Business Secretary today said the Government cannot protect families ‘100 per cent’ from spiking energy prices as he defended Rishi Sunak‘s cost of living support package.
Kwasi Kwarteng admitted households are facing a ‘very difficult time’ amid rising energy costs and soaring inflation.
He said ministers are ‘trying to shield people from global price increases’ but the Government will not be able to totally absorb the hit on its own.
Mr Sunak on Thursday announced a £9billion support package, including a one-off repayable £200 energy bill discount and a £150 rebate on council tax bills, but he immediately faced calls to go further.
Labour has long called for the Government to slash VAT on fuel bills to save families an extra £200 but Mr Kwarteng this morning effectively ruled it out as he said it is ‘not something that he (Mr Sunak) is considering’.
Kwasi Kwarteng admitted households are facing a ‘very difficult time’ amid rising energy costs and soaring inflation
Average energy bills will soar by £693 from April following a review of the nation’s energy price cap
Last Thursday was dubbed ‘Black Thursday’ after the Bank of England warned households face the worst fall in living standards since records began more than 30 years ago.
The Bank predicted that spending power would tumble by two per cent this year – with wage rises failing to keep up with the soaring cost of living.
Policymakers also warned that inflation would hit 7.25 per cent in April – up from its November forecast of seven per cent, and the highest since August 1991, when John Major was in power.
The Bank’s grim warning came on the day that families were told average energy bills would soar by £693 from April when the price cap is hiked, with dual fuel bills set to hit almost £2,000. The cap is expected to rise again in the autumn.
Families are also bracing for a 1.25 per cent hike in National Insurance in April to raise extra cash for the NHS and social care.
Mr Kwarteng told Sky News this morning that ministers have said ‘very clearly that this is a difficult place to be… because we have seen a quadrupling, four times increase, in gas prices’.
The Business Secretary was told that the Chancellor’s support package was no where near enough to cover the energy price hike.
He replied: ‘It is going to be a very difficult time and I have maintained that throughout the last few months.
‘That is why we have got the price cap, we are trying to shield people from global price increases.
‘It is not something that we can do 100 per cent but I think the package of measures the Chancellor announced last week were impressive and extensive as well.’
Labour has urged the Government to slash VAT on fuel bills to save every household an estimated £200.
But ministers have opposed the move, arguing it would be ‘regressive’ because it would benefit everyone and not just those people who are most in need of support.
Asked if the VAT cut is now officially off the table, Mr Kwarteng said: ‘I was just mentioning the fact that the VAT off fuel is a benefit that is quite regressive actually because rich people will benefit just as much as people on lower incomes.
‘That is not something which the Conservative Party or the Chancellor want to do. They want to have more progressive taxes so that people who need the money are the ones who get it.’
Asked if the Chancellor is ruling it out, the Business Secretary said: ‘That is up to the Chancellor. I have spoken to him and that is not something that he is considering.
‘He had a very full package last week. I was there in the House for 70 minutes, I listened to it very carefully, I agreed with all of it, and I think it is a good set of measures that he has brought in.’
