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Money Expert Warns Cost-Of-Living Pledges Made By Tory Leadership Rivals Are "Trivial"

3 min read

Personal finance expert Martin Lewis has dismissed cost-of-living policies set out by Rishi Sunak and Liz Truss as "trivial" and urged the government to take action now to help households ahead of the energy price cap rising again.

Lewis warned that the continued rise of energy prices would "throw many households into a terribly difficult financial situation that will leave them making some awful choices".

He said that government waiting until September when the next prime minister is in Downing Street to take further action is "absolutely too late" and that “we will already be absolutely in the mire of this.”

"I've never seen anything like this," he told BBC Radio 4's Today programme.

The energy price cap, which is set by regulator Ofgem, is set to reach over £3,400 in October and rise again in January, as Russia's attack on Ukraine continues to drive global gas prices. Industry experts BFY said yesterday it could reach as high as £3,850 at the start of next year. 

The cost-of-living crisis has been a major talking point in the Conservative leadership contest up to now. 

Truss, who is currently the favourite to succeed Johnson, has promised to slash taxes and hold an emergency budget if she becomes Prime Minister. The Foreign Secretary has said she will suspend energy levies to help households save money on the energy bills.

Sunak on Tuesday announced that he would temporarily slash VAT on energy bills in order to help families cope with soaring costs. The former Chancellor argues that it would be unwise to slash taxes across the board until the government has got a grip on inflation.

Lewis, who founded the influential personal finance website, this morning said the proposals put forward by the candidates so far "are trivial in the big picture of this," however.

He called on Johnson, Sunak and Truss to come together now and create a further package of support before the cap rises again in the autumn, describing Johnson's outgoing administration as a “zombie government" that "can’t make any big decisions".

“Let’s be absolutely plain here: we know roughly what the price cap is going to be," he said.

"The October price cap is based on prices between February and mid-August, so we’re nearly at the end of that.

"The current prediction is prices will rise 77 per cent on top of the 52 per cent we saw in April, taking the typical bill to £3,500 a year. That’s the prediction I go for, others say it’ll be higher. We are expecting it to rise again in January.

“What that means, and just to listen to this, is that from year on year, from last October to this October, a typical house will be paying £2,300 a year more on their energy bills alone.

"Forget the rises in mobile, broadband, tax, petrol and food."

Lewis urged Johnson and his potential successors to "go and sit in a room together" and "make a collective decision now of what help you can give".

"You’re in all the same party. You should be able to work out a unifying policy, something for heaven’s sake. Sit in a bloody room and decide what you’re going to do," he said.

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