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Cost of living crisis overshadowed by partygate – the four policies that could solve it

NewsCost of living crisis overshadowed by partygate - the four policies that could solve it

Mr Johnson and his MPs are anxiously awaiting the results of senior civil servant Sue Gray’s report. The report, now several weeks in the making, seeks to determine the extent of lockdown rule-breaking at Downing Street between 2020 and 2021. Her findings could ultimately draw a line under the fiasco, allowing ministers to concentrate on policymaking, with the cost of living crisis one of the most pressing issues at present.

Despite hailing job growth and speedy economic recovery in the UK, concerns are growing over the cost of living.

Data has painted a picture of the desperate situation facing poorer Britons, with inflation reaching new heights.

Consumer price inflation rocketed to 5.4 percent in December, the highest since 1992, nearly 30 years.

Families will have to fend off an additional crunch from rising energy bills, higher gas prices and an impending National Insurance hike.

A source from the Treasury told The i that talks between Mr Johnson and Chancellor Rishi Sunak have stalled amid questions about the country’s leadership.

The publication added that the pair were due to meet this week and “narrow down a list of policy options”, but have not done so yet.

A Government spokesperson said: “We’re providing support worth around £12 billion this financial year and next to help families with the cost of living and further work is ongoing to look the appropriate response to cost of living pressures facing people.

“We’re cutting the Universal Credit taper to make sure work pays, freezing alcohol and fuel duties to keep costs down, and providing targeted support to help households with their energy bills.”

As the country awaits official policy confirmation, experts have introduced potentially helpful ideas.

Among them is Mike Foster, the CEO of not-for-profit trade body the Energy and Utilities Alliance (EUA), who told Express.co.uk about viable paths the Government could take.

READ MORE: Universal Credit changes announced to impact 500,000 Britons

Cutting VAT

One of the more immediate policymaking decisions the Government could take is to cut VAT, Mr Foster said.

Mr Johnson last visited the policy in 2016, and it could provide some relief for household bills nearly six years later.

Mr Foster said: “This would save around £100 of an energy bill of £2,000 a year.

“Ofgem is expected to announce this figure for the new price cap, effective from April.”

The energy price cap figure should come by February 7, and the Prime Minister is reportedly considering a VAT cut.

A source told The Sun earlier this week that the Government could deliver on the proposal in two ways.

They said it would include “something for everyone, such as a cut to VAT” and a targeted component for “the least well off”, but they added, “it’s still to be decided”.

The Warms Homes Discount

The Warm Homes Discount scheme delivers a £140 discount for winter electricity bills from 2021 to 2022.

Only Pension Credit recipients who also claim “core group” Guarantee Credit or those on a low income may receive it.

The one-off discount between October and March could go further, Mr Foster said.

He said the Government could increase beyond its current rate to provide “short-term relief to bill payers”.


Penalty payments

The final policy suggestion from Mr Foster was for the Government to find a way of “scrapping the penalty payments for failed energy suppliers falling onto the shoulders of bill payers”.

He said: “Now, when am energy company goes under, our energy bills are increased to pay for their failure.”

Many Britons will have seen additional costs over the last year, as several companies have failed since 2021.

More than a dozen, among them Avro Energy and Daligas, have suffered from the energy crisis.

What can the UK do beyond policy?

Mr Foster said the UK should focus on looking at different energy sources.

He said: “In the longer term, we need to switch away from natural gas and the undue influence of Putin and instead use hydrogen in our gas networks.

“We can produce more of it ourselves, becoming more energy-independent, but if we do need to import it, then there are friendlier nation-states to deal with, who will be exporting hydrogen.”

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