Rishi Sunak has rejected the idea of freezing energy bills — despite some firms calling for it to provide a lifeline for struggling households.
The Tory leadership contender denied that his plan to help families with soaring costs amounted to “tinkering” after some energy bosses said the price cap should be frozen at roughly its current rate of £1,971 a year.
Octopus Energy, Ecotricity and Utilita have all backed a scheme called the tariff deficit fund that would keep bills at this level for the next two years.
It would be financed through commercial banks contributing cash to the state-backed fund, that would then be paid back over a 10-15 year period through a surcharge on bills on through taxation.
Octopus Energy CEO Greg Jackson told BBC Radio 4’s Today Programme on Monday: “The big thing here is we need more help for customers from the government.
“The reality is customers are being asked to pay the price of gas which is weaponised by Putin, and they shouldn’t expect to do that alone.”
Their intervention comes as the new energy price cap is set to be announced on Friday, which some experts predict could reach an eye-watering £3,500 in October.
Sunak, who is vying to replace Boris Johnson as prime minister, has said he would temporarily slash VAT on energy bills as well as increase existing support for families to help bring down bills.
Asked why he would not back a freeze on energy bills — which the Labour Party has also proposed — Sunak added: “I don’t think the Labour plan is the right plan.
“And I think it’s not right to say that it’s fully costed, because I think it’s been widely criticised for its credibility of that costing. And you have to think about the affordability of these things given the scale and the duration of the challenge that we’re facing.”
Sunak said he could not commit to a freeze because he did not know the amount that bills would be in the autumn.
Presenter Amol Rajan interjected: “But the energy companies don’t know the amount, they don’t know the cap that is coming on Friday.
“A lot of people who run these companies who are in your position of not knowing the cap, they do have a position, which is that there should be a cap even if they don’t have the figure on Friday.”
Sunak replied: “Let’s be clear, my job as prime minister is to make sure that I support the country and vulnerable families through it.
“I think the interest that I’m going to have are not necessarily going to be the same as the interest of the energy companies in all of this, so let’s just be clear about that.
He added: “Until we know the exact amounts, until I have the job you can’t put a precise figure on that.
“But the plan is in place and my track record speaks for itself.”
Sunak’s rival, Liz Truss, has also ruled out freezing the energy price cap. She has said she would support households through tax cuts and through temporarily lifting green levies on energy bills.
Truss has also come under fire for saying that she would hold an emergency budget if she is made prime minister, before clarifying that it would be a “fiscal event”.
The foreign secretary attracted criticism after she initially said she was not planning to ask the Office for Budget Responsibility (OBR) for a forecast ahead of the proposed emergency budget she wants to announce next month.
And asked whether he would vote against Truss’s economic plans, Sunak said: “I’m not going to engage in these things because acting like this race is over isn’t right.”
Sunak also said there was a “very clear difference” between his plans for the country and those promised by Truss as he was challenged about the length of the Tory leadership race.
Asked if he thought the process had gone on too long, the former chancellor said: “When it’s over I’m sure we can look back and reflect.
“One thing is clear – there is a very clear difference of opinion in this leadership election, there is a difference of opinion in how you grip inflation and whether that’s a priority or not; there’s a difference of opinion about whether you prioritise – in my view – helping vulnerable people with the cost of living rather than giving tax cuts funded by borrowing to very large companies and relatively wealthy people.
“Those are big differences, and it’s right that we have a debate about them because they are going to shape the course of our nation over the coming months and years, so I think it’s important these ideas are debated.”