U.K.’s Johnson Promises Measures to Help With Rising Energy Costs

(Bloomberg) --

U.K. Chancellor of the Exchequer Rishi Sunak will announce a package of measures to alleviate the impact of rising energy costs “in due course,” Prime Minister Boris Johnson said on Monday, as his government grapples with a growing squeeze on the cost of living.

Johnson is coming under increasing pressure from opposition parties and members of his own ruling Conservatives to ease the burden on ordinary families after inflation soared to a three-decade high. Britons are set to be hammered by a further double-whammy in April, when a new 1.25 percentage point increase in tax is due to take effect to help pay for health and social care, and when a price cap on energy bills is set to rise by around 50%.

“We all understand the pressures that the cost-of-living crunch is putting on people and it is being driven by the inflation you are seeing around the world, particularly in energy costs,” the prime minister told reporters in Essex on Monday. “I know the chancellor is looking at a package of things to abate energy costs.”

Johnson's spokesman, Max Blain, later told reporters that a cut in value-added tax on energy bills remains an option, while suggesting there's a preference for measures that are more targeted on poorer families.

“We do appreciate that this is something that will impact a large proportion of people,” Blain said of rising costs. “We haven't ruled anything out at this point, but obviously we do want to target it towards those who are most vulnerable,” he said, adding that a VAT cut “by its nature benefits those who are wealthy.”