Hunt plays down hopes of more help with energy bills in April

Jeremy Hunt has played down hopes ministers will reverse plans to raise energy bills from April after the UK narrowly avoided recession.

The chancellor warned the economy was not out of the woods yet after growth flatlined in the last three months of last year.

The preliminary estimate meant the UK did not meet the technical definition of a recession – two consecutive quarters of declining gross domestic product (GDP).

But while Mr Hunt said the figures showed an underlying resilience he added “we are not out of the woods. Inflation is still much too high and it is causing pain for families up and down the country, which is why we need to stick to our plan to halve inflation.”

He also indicated that there was no headroom for a “major new initiative” to help households with energy bills, which are set to soar from April.

The energy price guarantee is due to rise from £2,500 to £3,000 a year on average, despite the wholesale cost of energy falling.

Asked if he was ruling out more support, the chancellor said: “We constantly keep the help we can give families under review.

“But if you’re saying ‘do I think we’re going to have the headroom to make a major new initiative to help people?’ I don’t think the situation would have changed very significantly from the autumn statement, which was just three months ago.”

He said that ministers know how tough it is for many people to deal with huge spikes in energy bills.

But he added: “We also have to be responsible with public finances.”

The government announced a windfall tax on soaring energy profits last year after sustained pressure from Labour on the issue.

But Mr Hunt said that as energy prices had come down so too had the receipts from the windfall levy.

“So we have to look at everything in the context of what is responsible for public finances, because if we don’t, we’ll just see interest rates go up and then everyone who has a mortgage up and down the country will face a different kind of cost,” he said.

Consumer journalist Martin Lewis has urged Mr Hunt to halt plans to raise bills and spoken of a “frightening” rise in fuel poverty because of the cost of living crisis.

He has written to the chancellor to warn that 1.7 million people could be pulled into hardship if he does not freeze prices this spring.

Mr Lewis said that pushing back the price hike would be both “practical and fair” and help people survive until bills begin to fall later in the year.

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