Energy bills set to hit £4,000 a year after Liz Truss’s ‘broken promise’ on help

Struggling families will be ‘aghast’, say campaigners after U-turn on two-year support pledge

Britons face their annual household energy bills rocketing to £4,000 from April after Liz Truss U-turned on her promise of two years of government support, experts have warned.

New chancellor Jeremy Hunt announced on Monday that the government could only guarantee its cap on the unit price of energy – designed to keep average bills at no more than £2,500 – for another six months.

Opposition parties, fuel poverty campaigners and union leaders said Ms Truss’s promise to protect families for two years “lies in tatters” – warning of a frightening “cliff edge” ahead in spring.

Mr Hunt said the Treasury review would aim to come up with support plan that will “cost the taxpayer significantly less” beyond April in a shock move aimed at reassuring markets that the government can balance the books.

The Resolution Foundation estimated that the U-turn could save the Treasury up to £40bn in 2023-24 – but would allow the annual energy price cap to rise to £4,000 from April.

“The price of shielding the public finances from wholesale gas markets next year is more pressure on households, with the energy price cap now on course to hit £4,000 next April – almost double its effective level today,” said chief executive Torsten Bell.

Mr Hunt suggested the government will end universal support and look to target help for those most in need after April – but it is not yet clear who will be entitled to support, and whether it will be aimed at only those on benefits.

The End Fuel Poverty Coalition, an umbrella body for 60 charities and campaign groups, called for clarity – saying the financial cliff edge faced by millions “has now become even steeper”.

Coordinator Simon Francis told The Independent: “We thought everyone could rely on some support, but that’s been taken away. We need clarity on support for the most vulnerable as soon as possible.”

The National Energy Action group said the prospect of the unit price cap ending after six months had created “huge uncertainty” – warning that some families were already rationing their energy usage to “dangerous levels”.

Chief executive Adam Scorer said: “Many vulnerable people were holding on by their fingertips. Government has to be very, very careful it doesn’t prise them away.”

John Palmer from the Independent Age charity said Mr Hunt’s statement was “extremely concerning”. He added: “Now millions of older people are wondering if they will be abandoned by the government and left with unaffordable energy bills and freezing homes next year.”

Ms Truss and her previous chancellor Kwasi Kwarteng’s two-year plan to limit average annual household energy bills to £2,500 would cost £31bn in the first six-month period, the Treasury estimated last month.

Mr Hunt could consider reform of the cap on the unit price, so it is only available beyond April to those on benefits or at certain earnings level.

But given the practical complexities for energy companies in trying to work out customers earnings or benefits, campaigners believe it more likely the new chancellor will instead offer more direct support to the most vulnerable through the benefits system.

Consumer champion Martin Lewis urged Mr Hunt to consider ways to help those not on benefits. “The post-April support will still need [to] reach a decent way up the net and support middle earners – energy rates are still huge.”

Labour again called on the government to consider a new windfall tax on the fossil fuel giants to fund more support – saying the country still had “no clarity” of the impact of the disastrous mini-Budget.

“The humiliating climbdown on their energy plan begs the question yet again – why won’t they bring in a windfall tax on energy producers to help foot the bill?” said shadow chancellor Rachel Reeves.

Unison’s general secretary Christina McAnea said the U-turn meant the government “simply cannot be trusted”, adding: “Liz Truss promised again and again to shield people from rocketing energy bills – but even that help now lies in tatters. Struggling families will be aghast.”

However, The Institute for Fiscal Studies (IFS) said Mr Hunt’s decision to review the universal guarantee for all households for something more targeted was “especially welcome”.

IFS director Paul Johnson said: “We need to do everything possible to put in place a better designed, better targeted and less expensive scheme next year. Even a slightly less generous scheme could save billions, mean less government debt needs to be sold, and therefore reduce future interest payments.”

Tory chair Jake Berry had boasted only on Sunday that the two-year price cap pledge “lowers energy bills for households, businesses and gives extra support to the most vulnerable”.