Ministers ‘could give energy companies billions of pounds in loans’ to help them spread the surging price of gas over a decade to protect families from rocketing bills amid growing calls to tackle the cost of living crisis
Energy companies could be handed billions of pounds of Government loans next year to protect families from surging gas prices.
Whitehall officials are said to be working on a loan scheme which would make it possible for firms to avoid having to impose massive increases on household energy bills.
The cash would enable companies to spread the currently spiking cost of wholesale gas over a decade, so they would not have to pass it on to consumers in one big hit.
Ministers are considering the plan, volgens The Times, but officials believe the figure of £20billion which has been requested by the industry is ‘far too high’.
It came as Boris Johnson faces growing pressure from across the political spectrum to address the cost of living crisis.
Energy companies could be handed billions of pounds of Government loans next year to protect families from surging gas prices
Whitehall officials are said to be working on a loan scheme which would make it possible for firms to avoid having to impose massive increases on household energy bills
Boris Johnson faces growing pressure from across the political spectrum to address the cost of living crisis
A new report published by a leading think tank yesterday warned that next year will be the ‘year of the squeeze’, with households facing a hit of at least £1,200.
The Resolution Foundation said the public face a choke point in April when the energy price cap is due to be increased and a 1.25 percentage point increase in National Insurance contributions (NICs) comes into effect.
Tory MPs and Labour have called for the Government to cancel the planned tax hike.
A Government source told The Times that ‘you add it all together and we’re in a really, really tricky situation’.
They said the Government needs to start announcing remedies to the cost of living crisis ‘soon’ because ‘at the moment there’s nothing — just government policies making it worse’.
Global gas prices have reached record highs in recent weeks, met 26 energy suppliers having gone bust this year.
Estimates suggest the record prices will leave the industry and consumers with a bill of between £15billion and £20billion next year.
Some experts have warned that surging wholesale gas prices could add as much as £1,000 to household bills next year
How the cost of living could increase in the next few months – even before any surge in inflation
A loan scheme would allow the industry to meet the current cost of wholesale gas while consumers would be protected against a massive year-on-year increase in bills.
Spreading the loans over a decade would allow firms to pay the cash back gradually, for example at a rate of £2billion a year if the Government agreed to the £20billion fund.
Suppliers have warned Business Secretary Kwasi Kwarteng that energy bills could double in April when the price cap is reviewed unless help is offered.