Boris Johnson has promised to take steps in response to rising energy costs

Boris Johnson says he’s spoken with Chancellor Rishi Sunak on how the government might assist individuals affected by rising energy prices.

Prime Minister Justin Trudeau is under pressure to act on growing family prices, with further limited bill hikes likely in April.

To help decrease costs, several Tory MPs want green charges and VAT to be reduced.

Labour, which also wants VAT abolished, proposes heavier taxes on oil and gas companies.

The party stated that the money raised will be used to pay for more generous government subsidies to assist low-income households with costs.

Mr Johnson said on Monday that ministers were aware of the challenges that individuals were encountering and that “we’re absolutely looking at what we can do.”

Energy UK, a trade group, anticipates that bills would rise by up to 50% in April, when the new price cap, which will be decided in February, takes effect.

There have been fears that rising wholesale gas prices throughout the world might result in ordinary households paying around £700 more per year.

Mr Johnson told reporters during a visit to a vaccination center that the increases were due to “wide inflationary pressure” brought on by the world economy’s “recovery from Covid.”

“We have to help people, particularly low-income people, we have to help them with the expense of their gasoline – and that’s what we’re going to do,” he continued.

When asked if he planned to meet Mr Sunak this week, he said: “I’ve been meeting with the chancellor on a regular basis. Last night, I met with the chancellor to discuss it.”

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Mr Johnson is set to meet with Mr Sunak for the first time on Monday, though no decision on what to do is expected right away.

Labour has warned that the upcoming hike in the energy limit, along with the projected increase in employees’ National Insurance, will result in a cost-of-living catastrophe for many people.

The party proposes to spend an extra £3.5 billion on the warm homes subsidy, raising it from £140 to £400 per year and tripling the number of families eligible to 9.3 million, or almost a third of the total in the UK.

It also intends to reduce the 5% VAT rate on home energy bills for a year, starting in April, claiming that this will save households £89 per year.

The party claims it would fund its ambitions with a 10-percentage-point rise in corporate tax paid by North Sea energy producers on their earnings over the course of a year, as well as higher-than-expected VAT collections owing to inflation.

Sir Keir Starmer, Labour’s leader, said his party was “filling the leadership vacuum that the administration has left with a proposal to really decrease bills.”

Labour will try to use a Commons discussion on Tuesday to get a vote on its VAT-cut plans next month.

‘I’m raking it in,’ says the narrator.

The Liberal Democrats have also proposed a windfall tax on energy companies to help poorer households, as well as a ten-year programme to increase home insulation.

“It can’t be acceptable that a few energy fat cats are raking it in from record gas prices when millions of people can’t even afford to heat their homes,” said leader Sir Ed Davey last week.

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However, the offshore industry group Oil and Gas UK has stated that a windfall tax would give customers “false optimism” and harm the UK economy.

The charge, it claims, would not benefit consumers in the long run since it would discourage investment and increase the UK’s reliance on imported foreign gas.

Mr Johnson is also under pressure from his own party to act in the coming weeks to cut family prices.

A group of Tory MPs and peers called on him earlier this month to eliminate VAT on bills and examine taxes to help fund the government’s environmental programs.

Conservative MP Stephen McPartland told the BBC on Monday that the government should establish “credit facilities” to help energy companies deal with price volatility.

He said that this would allow businesses to tap into their cash reserves as an alternative to raising the government’s normal tariff ceiling in April.

Mr Johnson said last week that a VAT cut would be too “broad” a tool because it would touch all households, including the wealthiest, rather than focusing on the most vulnerable.