could more than wipe out expected gains in living standards<\/a> this year.<\/p>\nIn her spring forecast speech on Tuesday, the chancellor, Rachel Reeves, promised to \u201cprotect families from the turbulence that we see beyond our borders\u201d. She said that when governments lose control of the economy, people feel it \u201cin their pay packets, in their bills and in their mortgages\u201d, contrasting this with Labour\u2019s approach.<\/p>\n
As well as driving up energy bills, rising oil and gas prices have also caused markets to dial down expectations for interest rate cuts by the Bank of England \u2013 another way Labour had hoped households would start to feel better off.<\/p>\n
Energy providers are already starting to alter their fixed price tariffs, according to industry figures. According to MoneySuperMarket, 57 fixed price tariffs have already been removed or updated in the last 72 hours.<\/p>\n
One frontbench MP said: \u201cIf we can suddenly find \u00a310bn because the always-wrong OBR changed their mind last November, we can find \u00a310bn to get people\u2019s bills down today.\u201d<\/p>\n
Another junior minister said: \u201cI don\u2019t think it would be credible for us to say people have to absorb the costs when even Liz Truss did not allow that to happen.\u201d<\/p>\n
However, experts are already warning the government against an across-the-board rescue package of the kind launched by Truss in autumn 2022 \u2013 after Russia launched its invasion of Ukraine \u2013 at a cost of more than \u00a330bn over two years.<\/p>\n
\u201cThis kind of government support is a key reason that debt has been rising in recent years,\u201d said Helen Miller, director of the Institute for Fiscal Studies (IFS). She urged ministers to \u201ctry to target help to where it\u2019s most needed\u201d.<\/p>\n
Similarly, the Resolution Foundation said a fresh energy price shock would increase the urgency of its call for a \u201csocial tariff\u201d that provides cheaper energy for the poorest households.<\/p>\n
The Labour MP Graeme Downie, a member of the Energy Security and Net Zero select committee, said the government had to show it was being proactive. \u201cThe government has done the hard yards investing in infrastructure, beginning to secure the UK\u2019s energy future and control costs for businesses and households, but there is a real risk that unless we firmly point the finger of blame for rises in energy costs where it belongs \u2013 with Iranian actions \u2013 and prepare to intervene to support ordinary people, there is a risk the public turn on the government for something that is not their fault.\u201d<\/p>\n
Sam Alvis, associate director for environment and energy security at the IPPR thinktank, said: \u201cThere are limited actions government has to materially reduce energy prices for people, and none of them are free. But given both the direct inflation benefits of acting on energy prices, and cost of living being the public\u2019s number one priority before the war in Iran, there are few more important ways to spend spare fiscal space now.\u201d<\/p>\n
\u201cThere are three ways government could help households: first, increasing access to solar, batteries or EVs that insulate households from rising gas prices. Second, we pay for lots of things through charges on energy bills \u2013 government has already moved some of those to general spending, moving more particularly new infrastructure costs would be fairer. Third, potentially increasing the warm home discount to support the most vulnerable \u2013 but again, that currently comes as a cost on bills.\u201d<\/p>\n
If a drawn-out conflict leads to a long period of high energy prices, Reeves is also likely to come under pressure to cancel the planned increase in fuel duty<\/a> due in September \u2013 something the Liberal Democrats have already demanded.<\/p>\nThe 1p a litre rise, announced in the November budget, is meant to be followed by another 2p increase in December, and 2p next March \u2013 reversing a cut made by Boris Johnson\u2019s government in 2022 after Russia\u2019s invasion of Ukraine.<\/p>\n","protected":false},"excerpt":{"rendered":"Ministers are discussing the possibility of intervening to protect the public against soaring household energy bills if the…\n","protected":false},"author":2,"featured_media":520613,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":{"0":"post-520612","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/520612","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=520612"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/520612\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/520613"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=520612"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=520612"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=520612"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}