Millions of UK Households to Pay More for Energy from April

By Staff, Agencies

Millions of UK households are going to pay more for their energy starting next April under plans to cut the generosity of the government’s gas and electricity support scheme expected to be announced by Jeremy Hunt on Thursday.

The chancellor is likely to use his autumn statement to say the need to save money and reduce state borrowing will require the household energy price cap to rise from £2,500 to an expected £3,000 to £3,100.

Hunt will also announce higher windfall taxes on oil, gas and electricity firms that have seen their profits rocket.

Despite the fragile state of the economy, the chancellor will say he needs to suck up to £60bn out of the economy through tax increases and spending cuts to help the Bank of England bear down on inflation.

He is expected to lower the threshold at which people start paying the 45p top rate of income tax from £150,000 to £125,000, in a substantial change of direction from the later-abandoned move to abolish the rate under Liz Truss’s government.

There are expected to be increases in capital gains tax and dividend tax, while personal tax thresholds are also likely to be frozen for a further two years from 2025-26. Council tax could also increase, as the rule limiting councils to 3% rises unless they have a referendum could be raised to 5%.

The latest official figures for the cost of living showed the annual inflation rate jumping to a 41-year-high of 11.1% last month, in large part due to a 90% increase in domestic energy bills.

The Office for National Statistics said that without the government’s support scheme the annual rate would have been close to 14%.