Brits face £2,800 energy bills as forecasters warn price cap likely to rise and costs set to soar
BRITISH households face soaring energy bills of up to £2,800 a year.
A price cap rise will lead to skyrocketing costs that will hit the nation’s bank accounts hard, forecasters have warned.British households will feel the squeeze as bills are set to soar[/caption]
The Office for Budget Responsibility (OBR) said the price cap was likely to rise by another 42 per cent in October.
This would mean a huge increase of £830, taking the average annual bill to around £2,800.
But Rishi Sunak has pledged to make green energy schemes cheaper for homeowners in a bid to offset a reliance on gas.
The Chancellor said households that install loft insulation or solar panels would save money from the scrapping of VAT on green materials.
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He told the Commons: “Thanks to Brexit, we are no longer constrained by EU law.
“So I can announce that for the next five years, homeowners having materials such as solar panels, heat pumps and insulation installed will no longer pay 5 per cent VAT.
“They will pay zero.”
He said solar panels would save a family £1,000 a year in tax and £300 a year on energy bills.
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Mr Sunak also added another £500million to the Household Support Fund.
This money helps struggling families on low incomes deal with the rising cost of living and it is distributed by councils in England.
It follows Rishi’s £150 council tax rebate and £200 discount on energy bills that is to be repaid in instalments after the energy crisis ends.
Opposition MPs said he should slapped energy firms with a windfall tax on profits.
Some pointed out the VAT cut for green materials would only benefit wealthy households.
Christina McAnea, general secretary of trade union Unison, said: “Cheaper solar panels won’t put food on the table for families worried about where their next meal is coming from.”
Next month, electricity bills will increase by £693 for millions of people due to the price cap rise.
And the OBR warned it is set to rise again soon.
The watchdog said: “Current futures prices suggest the cap will have to rise dramatically again.
“We assume it would rise by about 40 per cent.”
The OBR said this would cause inflation to reach a 40-year high of 8.7 per cent next winter.
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However, the watchdog said markets expected a fall in wholesale energy prices next year.
Bills should drop by about 30 per cent in April 2023.
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