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Benefits Boost Needed To Tackle Energy Bills Crisis, Former Work And Pensions Secretary Says

Benefits Boost Needed To Tackle Energy Bills Crisis, Former Work And Pensions Secretary Says

Stephen Crabb has called for energy support payments to be doubled 9Alamy)

3 min read

Conservative MP Stephen Crabb has called for a long-term "strengthening" of benefits to help alleviate the pressure of the cost-of-living crisis as energy prices continue to soar.

The energy price cap is expected to rise to over £3,500 in October with analysts predicting a further rise to nearly £5,000 in January as a result of record high wholesale gas prices.

Earlier this year, ministers announced all households would receive a £400 rebate on energy bills in October, with a further package worth £1,200 going to the most vulnerable households. 

Writing for The House, former work and pensions secretary Crabb said emergency payments to those receiving benefits would need to "at least double" to help people ride out the winter months, as further price hikes were forecast earlier this week.

Pressure has been rising on leadership candidates Rishi Sunak and Liz Truss to announce further support to immediately help households with the costs, which have almost doubled since the initial support package was announced in March.

Crabb said that while "help is coming", the next prime minister must take urgent action to help households survive the "extraordinary" rises, as he insisted their "first duty" must be to protect vulnerable people.

"The simplest approach, in the short term, would be to continue the system of emergency payments already in place," he continued.

"But realistically, these payments will need to at least double if they are to provide meaningful assistance for the coming price increases."

But Crabb said over the long term, the next prime minister should avoid offering "lumpy one-off payments" by increasing the rate of benefits.

"The £20 per week uplift to Universal Credit, for example, was one of the best targeted and most effective interventions during the pandemic. Ahead of a potential double-digit uprating of benefits and pensions next April, Conservatives should be ready to talk about the importance of strengthening social security in times of crisis."

Leadership frontrunner Liz Truss has already suggested she would consider announcing some additional support packages to provide immediate relief, but has said she is more in favour of offering tax cuts to help households keep more of their own cash rather than offering "handouts".

Those include cutting the "green levy" added to energy bills, and reversing the rise in National Insurance Contributions, but has faced criticism the plans would do little to help vulnerable households.

But Crabb said ministers considering the plan should "tread carefully" because of the potential long-term impact on the energy sector.

"Removing the so-called green levies from household bills would be popular in some quarters," he wrote. "But, given the role they play in supporting the renewal of our energy system and driving lower costs over the medium and long term, ministers should tread very carefully."

Labour has proposed that the energy price cap should be frozen at its current level, meaning that households would not increase further, with a £28bn package offered as a de-facto bail out to energy firms to stop them from collapsing due to the fall in revenue they would experience if bills were not increased.

But Crabb said the policy would be "incredibly expensive, poorly targeted" and would be "short-lived" if energy prices do not fall next year.

He added: "Between the global energy giants enjoying record profits and the electricity suppliers going bust and falling back on the taxpayer, customers can be forgiven for wondering what on earth is going on inside this complex sector.

"In rhetoric, tone and concrete action, the new administration will need to convince the public that it stands squarely on their side during this extraordinarily challenging period.

"The window for doing that will be very narrow indeed, with no simple solutions to hand."

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