Average energy bills could pass £3,000 a year as 'Scrooge' Jeremy Hunt reduces support

Chancellor Jeremy Hunt is to set out his replacement for the current support scheme keeping average bills at £2,500 in the Autumn Statement on Thursday.

It is expected that the reduction in support will lead to household bills rising by up to £3,100 - an additional £600.

The Sunday Times reported that Mr Hunt is preparing to cut the current £60bn cost of support for the initial six months of support introduced by Liz Truss and Kwasi Kwarteng from October to £20bn for the six months from April.

From then, average bills are expected to rise to between £2,800 to £3,100.

While international wholesale prices for gas have tumbled in the past few months – dropping from 550p a therm in August to 38p at the start of this month – analysts expect fresh rises as winter sets in and consumers to face higher bills in 2023.

Mr Hunt has refused to confirm details of the new package but it has been reported support will be targeted at pensioners and benefit claimants to keep their bills around the same level as the present £2,500 guarantee.

In an interview in which he also described himself as preparing to be ‘Scrooge’, the Chancellor told the Sunday Times: “We have to be honest with people; it’s not possible to subsidise people’s energy bills indefinitely.”

Asked if the average family could again be facing bills of between £3,000 and £4,000 in the spring, he told the BBC’s Sunday with Laura Kuenssberg: “I will explain the support we’re giving (on Thursday).

“I think it’s very important that we do support energy bills.”

He said it was “the right thing to do” for Liz Truss and Kwasi Kwarteng to bring in a new price guarantee, but stressed help must be offered on a “sustainable basis”.

Mr Hunt said a “proper energy policy” is not just about “short-term support”.

“It’s also about showing people credibly – and I stress the word credibly – that we have a plan that means that we can bring down the price of energy on a long-term basis,” he said.

Without going into detail about his precise plans, he said people will continue to receive support, but that there will be “some constraints” to this.

“Will it be uncapped, unlimited? We have to recognise that one of the reasons for the instability that followed the mini-budget was that people were worried that we were exposing British public finances to the volatility of the international gas market,” he said.

“So, there has to be some constraints to it.

“But, yes, we will continue to support families and I will explain exactly how we’re going to do that.”

In his interview with the Sunday Times, Mr Hunt said the “tragedy” of Trussonomics was that both the former PM and her chancellor had the right idea about boosting growth.

But he said it was a “mistake” to act without showing “we can pay our way as a country”, adding that he will “put people ahead of ideology”.

The disastrous mini-budget may have cost the country as much as £30 billion, according to the Resolution Foundation, potentially doubling the task at hand for the Chancellor, as he seeks up to £60 billion in savings and extra revenue.

The think tank’s economists estimate that Liz Truss and Kwasi Kwarteng blew £20 billion on unfunded cuts to national insurance and stamp duty, with a further £10 billion lost to higher interest rates and Government borrowing costs, the Observer reported.

Mr Hunt suggested he will not be pulling any rabbits out of the hat when he delivers his statement next week, unlike his predecessor – who dramatically whipped out a cut to the top rate of income tax in his ill-fated “fiscal event”.

“I think it is fair to say this is going to be the first rabbit-free budget for very many years,” he said.

“I’m sorry to disappoint but no, this is not going to be a time for rabbits I’m afraid.”

He warned people can expect some “very horrible decisions” as part of a bid to “get us back into the place where we are the fantastic country that we all want to be”.

“I’m Scrooge who’s going to do things that make sure Christmas is never cancelled,” he declared.

Mr Hunt said he thinks an official recession is “likely” after GDP shrank by 0.2 per cent between July and September.

“The question is not really whether we’re in recession, but what we can do to make it shorter and shallower,” he added.

He insisted the “number one thing” he can do on Thursday is help tackle sky-high inflation.

“If we can, with the Bank of England, control inflation, then we will be able to contain the global rise in interest rates, contain the rises in mortgage rates that people are seeing, contain the cost of loans that businesses borrow, and have a chance of getting back on track,” he said.

“But that stability is what has been missing — mainly thanks to (Vladimir) Putin’s invasion of Ukraine. This is a ‘made in Russia’ recession and we need to restore that stability as the first step to growth.”

He also made the case for “honest money” and “honest politicians”.

“For Conservatives, we all understand that a successful economy, a dynamic economy, needs to have low taxes and sound money,” he said.

“But sound money has to come first and, you know, Margaret Thatcher said there’s nothing moral about spending money you don’t have.”

In a sign of what is to come on Thursday, Mr Hunt said “people with the broadest shoulders will bear the heaviest burden”.

Labour would be constrained in what it could do around public finances if it came into power, shadow chancellor Rachel Reeves has acknowledged, blaming the “mess” it would inherit from the Conservatives.

She told BBC’s Sunday with Laura Kuenssberg programme: “I do recognise that an incoming Labour government will not be able to do everything that we want as quickly as possible, and that is frustrating because the way that the Government has managed our economy and our public finances this last decade means that we’ve both got public services on their knees and public finances in a mess.

“An incoming Labour government will inherit that.”

She said everything in Labour’s next manifesto will be “fully costed and fully funded”.

“We recognise that we’re going to inherit this mess, it will put constraints on us. But it’s important that we get both the stability and security that we need in our economy,” she said.

She insisted Labour would make fairer decisions.

She said: “Just because you have to make difficult decisions doesn’t mean you have to make the same decisions. The decisions and the choices that Labour would be making would make our tax system fairer and would grow the economy so that we’ve got the money for those essential public services.”

It is understood a cut to the threshold at which the highest earners start paying the top rate of tax is among the options on the table.