Jeremy Hunt set for last minute change to energy price cap, saving Britons hundreds of pounds

Jeremy Hunt talking on some steps

Jeremy Hunt is expected to make the announcement at the Budget

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Dan Falvey

By Dan Falvey


Published: 03/03/2023

- 13:42

Updated: 04/03/2023

- 11:04

The energy price guarantee had been set to rise from the start of April

Jeremy Hunt is set to scrap a planned rise in the energy price guarantee, shielding Britons from increases in their bills.

The Chancellor is thought to be planning to stick by the current £2,500 cap when he delivers the Budget later this month.


Ministers introduced the energy price guarantee last year to limit the surge in gas and electricity tariffs being paid by households.

Originally the price mechanism was due to rise to £3,000 per year from April 1.

Full length image of Jeremy Hunt

Jeremy Hunt will deliver the Budget on March 15

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But it is now thought that Hunt is planning to keep the cap at its current rate.

The Government has already started telling energy companies to prepare for the guarantee to remain at the current level, according to The Times.

Extending the policy at the current rate would cost the Government about £3billion.

The figure is far lower than the £13billion that it was estimated to cost when forecasts were made at the time of the Autumn Statement in November last year.

The drop in cost comes due to the price of wholesale energy falling at a much faster rate than had been anticipated.

At the moment the Government is paying the equivalent of around £1,800 per year towards the average household’s energy bill.

Even if it keeps support at today’s levels that will fall to around £800 from the start of April and get reduced to £0 from July, according to current forecasts.

The Treasury has refused to comment on the reports.

Grant Shapps being interviewed

Grant Shapps said he is 'sympathetic' to keeping the cap at the current rate

PA

Earlier this week Business and Energy Secretary Grant Shapps said he was "sympathetic" to the price guarantee being frozen.

Meanwhile Prime Minister Rishi Sunak said he remained committed to "continuing to cap energy bills".

The Chancellor will deliver his Budget on March 15.

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