Boris Johnson and Rishi Sunak will this week seek to finalise a package of measures to help millions of low income UK households with a looming big increase in their energy bills.
The prime minister and chancellor have agreed to prioritise “targeted support” for less affluent families struggling with rising energy costs rather than the same relief for all households, according to government insiders.
It comes as Johnson prepares to take receipt of a report into Downing Street parties held during coronavirus lockdowns written by Sue Gray, a senior civil servant.
The prime minister’s team is hoping Johnson can avoid a no-confidence vote on his leadership by Tory MPs following the report, after Whitehall officials said Gray had accepted a request by the Metropolitan Police not to refer in detail to the more serious parties it is investigating.
Dominic Cummings, Johnson’s former chief adviser who has become one of his leading critics, including on the parties, told New York Magazine it is his “duty” to get rid of the prime minister. He said removing Johnson was “an unpleasant but necessary job . . . like sort of fixing the drains”.
Johnson is trying to win over his Conservative critics by showing that, despite the partygate scandal, he has several key policy initiatives, including on the cost of living crisis.
Johnson and Sunak are considering how to improve up to three schemes providing financial help to pensioners and those on low incomes with their energy bills, by potentially increasing the size of payments available and the number of households that qualify.
The government is racing against the clock to finalise the package because industry regulator Ofgem will on February 7 announce a rise in the energy price cap, which analysts estimate could increase the average household bill from about £1,300 a year to nearly £2,000. It follows a surge in wholesale gas prices in recent months.
The Treasury has not ruled out a big intervention, whereby the government would pay energy suppliers when wholesale gas prices rise sharply, so they do not immediately pass on the increase to households, but officials said it would be difficult to implement at speed. “It’s fair to say the aim is to ensure some targeted support,” said one.
Separately the government will on Monday announce a new 75 per cent super levy, called the public interest business protection tax, that would apply to owners of energy suppliers that seek to sell valuable gas price hedges and close their businesses.
The government is concerned some owners could prematurely close down companies and net a windfall at the expense of customers.
Johnson’s focus on measures to help with rising energy bills comes after he ruled out delaying or scrapping an increase in employee and employer national insurance payments from April to secure £12bn a year for the NHS and social care.
Johnson and Sunak authored a joint article in the Sunday Times rejecting calls from some Tory MPs to ditch the national insurance rise.
The prime minister will meanwhile seek to woo Conservative MPs with the publication on Wednesday of a much delayed white paper on his signature policy to “level up” so-called left behind areas.
The paper will include a new target for council pension funds in England to spend at least 5 per cent of their £337bn of combined assets on local areas, which could potentially unlock £17bn of spending on housing and other infrastructure.
Michael Gove, levelling-up secretary, is examining the introduction of regulations under which councils would have to regularly report on their progress against the 5 per cent target.
The white paper will also include a £1.5bn brownfield scheme to regenerate parts of the country, although the money will come from funds announced in Sunak’s spending review.