Sat, 26 November 2022

Newsletter sign-up

Subscribe now
The House Live All
Economy
To solve the housing crisis, plan ahead for materials supply Partner content
Economy
Economy
Press releases

Lord Frost Says Tax Cuts Are "Right Way" To Tackle Energy Bills Crisis

Lord Frost Says Tax Cuts Are 'Right Way' To Tackle Energy Bills Crisis

Lord Frost said the next PM should avoid "major interventions" in energy markets

3 min read

Exclusive: Former Brexit minister Lord Frost has suggested major interventions in the energy market are the wrong approach to solving the cost-of-living crisis, but doesn't rule out support for the most vulnerable, as the government faces urgent calls to support people faced with skyrocketing energy bills.

The former chief Brexit negotiator, who has backed Liz Truss' leadership campaign, said tax cuts were the right approach to helping households adjust to higher prices, but conceded further support would likely be needed for those on benefits.

Both Truss and her leadership rival Rishi Sunak are under pressure to outline what steps they would take to protect households from surging bills, which experts predict could reach £5,000 by January, if they become prime minister on 5 September.

Speaking to The House, Frost, who resigned from Boris Johnson's government last year over Covid restrictions, said he believed the next prime minister should focus on the "future direction" of the energy market rather than making any major short-term interventions, but did not offer detail of what steps Truss may take to curb the crisis.  

"I have no particular insight into what the Liz team are thinking on this, so I am not relaying that," he said.

"But I think there are three big problems; the economy generally, there's energy and there's the NHS, and all of those are clearly going to cause difficulties this autumn.

"I think with all these things is that whoever wins, what should be done should be consistent with the future direction of travel rather than taking us further away from it."

Truss has already faced criticism over her plans to use tax cuts to help households, with Labour calling for ministers to freeze the energy price cap at its current level to protect customers from the predicted surge.

But Frost warned against any major interventions, suggesting it would compound problems in the future if energy markets do not return to lower levels.

"We should try and have these solutions, as far as possible, which involve giving people more of their money back to make their own decisions, rather than further interventions in the market, like price capping," he said.

"That takes the market further away from where it will eventually have to go back to."

But he conceded that further help would likely be needed to support households relying on benefits after Truss was warned her tax cutting measures would fail to provide to support to millions of vulnerable people.

"I expect obviously there will have to be some way of supporting people who are on Universal Credit and people who are not in work, but I still think for more people in the country that the right way is to allow people to keep their money and choose what they spend it on," he added.

"And the reality is if energy prices are higher, that's going to require adjustments and that's just the way it is."

Frost is widely expected to be handed a top job in Truss' cabinet should she win the Conservative leadership contest. 

But he refused to comment on "speculation" about the discussions, saying he was focused on the ongoing campaign.

"I don't think we should be speculating on that while the leadership campaign is still on," he said.

"We don't know what the result is, and I think it is best to focus on that."

PoliticsHome Newsletters

PoliticsHome provides the most comprehensive coverage of UK politics anywhere on the web, offering high quality original reporting and analysis: Subscribe

Read the most recent article written by John Johnston - All The Major Announcements In Jeremy Hunt's Autumn Statement

Podcast
Engineering a Better World

The Engineering a Better World podcast series from The House magazine and the IET is back for series two! New host Jonn Elledge discusses with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

NEW SERIES - Listen now