Boris Johnson says paying the £15billion ‘bazooka’ cost of living ‘will get us through until prices start to come down’ – but ‘the government can’t solve all the problems’
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Britons could face a long wait for the next round of cost-of-living aid after Boris Johnson and Rishi Sunak suggested what is being announced will have to wait until spring.
The Prime Minister said he hoped a £15billion package announced yesterday – including £650 for people on benefits from July and £400 on all household electricity bills from of October – ‘would push us through’ until prices ‘start to come down’.
Most experts don’t expect energy bills to start falling until April 2023 and even then they may only drop slightly.
The price cap on annual bills is currently nearly £2,000, expected to hit £2,800 in October and could drop in April. But analysts at Cornwall Insight believe it could only fall to £2,500 at this point.
The money announced this week won’t cover the entire rise in energy bills for most people – and that’s before soaring 9% inflation, public sector wage moderation and Conservative tax hikes are taken into account.
Boris Johnson called the package a ‘big bazooka’ but said: ‘We have to be absolutely clear with people, it’s going to be difficult, and the government can’t solve all the problems.
He added: “This is a very, very substantial commitment from the government to help us through what will still be a difficult time with rising energy prices around the world.
“What I think that will also help us do is push us through until I think prices start to come down and we’re in a much, much stronger position.”
Neither No10 nor the Treasury have ruled out announcing further aid in the autumn budget later this year.
But Chancellor Rishi Sunak also hinted he hoped the latest package would hold people until next spring.
He said support now would be “meaningful help over the course of this year until we get to that point”.
He also suggested that additional cash assistance will be less likely to be needed after this point, as increases in benefits and pensions are expected to increase by the September inflation figure in April 2023. This could be close of 10%, the largest increase in three decades.
He said: “Looking forward, what is likely to happen is benefits and pensions next year which will rise from the much higher level of inflation this year and which is expected to be much higher than inflation that people will actually experience next year.”
He added: ‘We’re sitting here in May, we don’t know what the energy bills will be next April.
“I think people can judge me on my actions over the past two years.
“I have always tried to be responsive to the situation that the country and the economy are going through and I will always act like that.”