Rishi Sunak baffles MP with claims Universal Credit is 'generous'
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The Chancellor of the Exchequer has come under pressure to deal with soaring energy costs after the price cap was lifted leading costs to spiral by £693. However, plans from the Government to spend hundreds of millions of pounds to help reduce bills by making homes more energy efficient have been blocked by the Treasury.
The plan put forward by Number 10 and the Business Secretary’s staff, which pushed for an expansion of the Energy Company Obligation scheme, was reportedly shelved by Mr Sunak’s department over spending agreements.
According to the Telegraph, the Eco scheme uses money raised from a levy on energy bills to pay for home energy efficiency improvements for the poorest households.
The recent proposal would have seen the Treasury put in £200million a year extra of taxpayer money to expand the £1billion scheme beyond those receiving benefits.
The move would have helped tens of thousands of penny-pinching households at a time when the cost of living crisis is starting to take hold.
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However, Mr Sunak is said to have rejected the demand while the Treasury stands firm on spending agreements set out last autumn.
A senior Government source said: “It would have been something that we could say to households: ‘We’re on your side, we want you to reduce your bills.’ But the Treasury doesn’t believe in it.”
The source also claimed the Treasury had kept removing lines from the energy strategy which had spending implications.
An ally of Mr Sunak has suggested shelving the plan could free up the Government to bring in more Conservative measures in the future.
They told the Telegraph: “We have to be scrutinising every extra penny of taxpayer money that is proposed for spending because ultimately, we want to do the Conservative thing and cut taxes for people.”
Wranglings between Number 10 and Number 11 have also led to a delay to the UK’s energy security strategy.
Growing tensions come after the Brexit-backing Chancellor made clear he was concerned about the scale of borrowing and soaring debt repayments.
The UK Government has also faced calls to help Brits deal with ballooning bills through a cut to VAT.
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The demand comes after Boris Johnson suggested the UK could axe VAT on energy bills when voters went to the polls in the 2016 Brexit referendum.
Writing a piece alongside Housing Secretary Michael Gove, Mr Johnson said: “When we Vote Leave, we will be able to scrap this unfair and damaging tax.”
Labour, a party whose MPs predominantly campaigned to keep the UK inside the European Union, have even called on the Prime Minister to deliver the Brexit dividend.
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