London Daily

Focus on the big picture.
Thursday, Jun 04, 2026

I understand anxiety over rising prices, says Chancellor Rishi Sunak

I understand anxiety over rising prices, says Chancellor Rishi Sunak

Chancellor Rishi Sunak has said he "understands people's anxiety... about rising prices" and insisted he will "always be listening" to concerns.

He pointed to a living wage rise and the winter fuel payment as ways the government is helping people.

But the chancellor is coming under pressure from Labour and some of his own MPs to cut the VAT on energy bills.

And minister Jacob Rees-Mogg is reported to have raised concern about a tax rise coming into force in April.

On Wednesday, the Financial Times said the leader of the House, Mr Rees-Mogg, had argued against a hike in National Insurance in a Cabinet meeting, calling instead for savings to be made in government spending.

The government says the rise will initially help tackle the backlog in the NHS, and later be invested in social care.

Asked if there were splits in the Cabinet over the tax, Mr Sunak said he had respect for his colleagues but added that it was "not a responsible thing to do" to "duck difficult decisions" and that people wanted the government to invest in the NHS and social care.

The tax rise is due to kick in during April, around the same time households could see a big rise in their energy bills.

Soaring global gas prices on the wholesale market have put pressure on suppliers, and 27 energy companies have gone bust.

Speaking in the Commons on Thursday, Conservative MP Peter Bone urged the government to cut VAT on energy bills to help consumers.

"Energy costs are not a luxury, they are a necessity, something that you can't avoid. You need to heat your home," he said.

Energy costs


Labour are also urging the government to scrap VAT on energy bills with the party's deputy leader Angela Rayner accusing the prime minister of failing "to invest in long term energy security" and that "yet again working families are picking up tab for his incompetence" at Prime Minister's Questions on Wednesday.

Liberal Democrat leader Sir Ed Davey says the warm homes discount should be increased from £140 per year to £300 and offered to more people.

Speaking to the Today programme, he said: "We've got to pay for it. But one of the other effects of the big rising global gas prices, as well as hitting people with their heating bills, is it's resulted in record profits for the oil and gas sector.

"I think at this stage, when people are going to face an average increase in energy bill of nearly £700, and these oil and gas sectors are making super-profits, it's not unreasonable to ask them to make a contribution."

Speaking from a vaccination centre in West Sussex, the chancellor said the government had put in place a series of measures to help people with energy costs.

"We announced half a billion pounds towards the end of last year to help millions of families - £100-£150 to help them get through the winter," he said.

The chancellor also cited the warm homes discount which reduces energy bills by £140, cold weather payments and winter fuel discounts.

"There is support there for people," he said, but added that he was "always listening making sure the policy we've got will support people in the way we want it to, and that's what our track record over the last year or two shows".

What are the options to tackle the energy crisis?

Abolishing VAT of 5% on energy bills would be quick and easy, but is considered a blunt instrument, as it would provide support to well-off customers who don't need it.

And for those that do need it, 5% of a possible £700 price rise is pretty small.

The government could temporarily suspend the additional levies on bills that fund green policies.

But that would be a tricky sell in some quarters, after the UK hosted a major global climate summit, and these levies are designed to reduce dependence on volatile fossil fuels.

One other option is to extend and expand the Warm Homes Discount. Currently, customers in receipt of certain benefits can apply for a one-off payment of £140.

And another option - suggested by the industry - would be to subsidise the energy companies themselves, by establishing a fund or facility which would allow them to draw down government cash when wholesale prices were very high and then pay it back when prices dipped again.


Rishi Sunak says he wants to “make sure policies we’ve got in place do help people”


Newsletter

Related Articles

0:00
0:00
Close
Japanese Technology Firm Fujitsu Launches Advanced Artificial Intelligence Tool for Corporate Disclosures
South Africa Officially Launches Nationwide Campaign for Highly Contested Local Government Elections
United Kingdom Commits Additional Funding for Unexploded Ordnance Clearance in Laos
Singapore Announces Stringent New Greenhouse Gas Regulations for Commercial Cooling Systems
Cambodia and Thailand Hold High-Level Border Security Talks at United Nations Headquarters
Myanmar Military Government and China Sign Major Agreement to Upgrade Media and Cultural Cooperation
Knife Attack at Swiss Train Station Leaves Three Injured in Suspected Act of Domestic Terrorism
Transnational Extortion Gang Threatens Canadian Police With Army of One Thousand Armed Operatives
Australia Imposes Forty-Two-Day Quarantine on Cruise Ship Passengers Following Deadly Hantavirus Outbreak
International Monetary Fund Unlocks Seven Hundred Million United States Dollars for Sri Lanka Following Economic Reforms
Australia Launches Record One Point Four Billion Dollar Lawsuit Against Chemical Giant 3M Over Contamination
China and Canada Foreign Ministers Meet in Ottawa in Effort to Stabilize Strained Diplomatic Ties
Indonesia Demands Urgent United Nations Security Council Reform Amid Escalating Global Conflicts
Extreme Weather Patterns Trigger Severe Drought in Madagascar and Destructive Flooding in East Africa
Indian State of Karnataka Faces Political Upheaval as Chief Minister Siddaramaiah Abruptly Resigns
Philippines and Japan Reaffirm Defense Ties as Crucial for Indo-Pacific Regional Stability
Norway Joins French Nuclear Deterrence Initiative in Major Shift for European Security Architecture
Global Critical Mineral Alliances Expand as Western Nations Move to Counter Chinese Supply Dominance
United States Imposes Fifty Percent Tariffs on Mexican Steel and Aluminum Ahead of Trade Pact Review
European Union and China Head Toward Major Trade Conflict Over Clean Technology Exports
United States Economic Growth Severely Downgraded to One Point Six Percent as Stagflation Fears Mount
World Health Organization Warns Central African Ebola Epidemic is Outpacing Containment Efforts
United States Treasury Department Conditions Sanctions Relief on Reopening of the Strait of Hormuz
Iranian Air Defenses Intercept and Destroy United States Military Drone Over Bushehr Province
Iranian Armed Forces Launch Ballistic Missiles Toward Unspecified Targets Prompting Regional Condemnation
United Nations Secretary-General Warns Global Order Facing Highest Level of Conflict Since 1945
Israel Issues Sweeping Evacuation Orders in Southern Lebanon Amid Intensified Hezbollah Conflict
Russia Announces Systemic Military Strikes Targeting Ukrainian Defense and Energy Infrastructure
United States and Iranian Negotiators Reach Draft Agreement to Extend Ceasefire and Resume Nuclear Talks
United Nations Security Council Deeply Divided Over United States Capture of Venezuelan President
US and Iran Exchange Direct Military Strikes Amid Fragile Gulf Ceasefire
World Health Organization Warns of Catastrophic Ebola Outbreak in DR Congo
Russia Threatens New Wave of Strikes on Ukrainian Infrastructure and Embassies
Scientists Warn Atlantic Ocean Currents Could Collapse Faster Than Projected
Anthropic Reaches $900 Billion Valuation in Historic AI Funding Round
Washington Imposes Crippling Sanctions on Iranian Maritime Authority
Japan and the Philippines Initiate Strategic Intelligence-Sharing Pact
Microsoft Deploys Autonomous Computer-Using AI Agents to Global Markets
Anthropic Secures $45 Billion Compute Infrastructure Agreement With SpaceX
U.S. Director of National Intelligence Resigns Amid Administration Shakeup
Micron Technology Crosses Trillion-Dollar Valuation Amid Unprecedented Hardware Demand
Canada and Germany Finalize Historic Long-Term LNG Export Agreement
China Expands International Travel Restrictions on Domestic AI Researchers
Japan Approves Sweeping Overhaul of National Intelligence Apparatus
Global Airlines Scramble Logistics as Middle East Airspace Remains Fractured
Japan's Naphtha Imports Plunge 47 Percent Amid Strait of Hormuz Closure
Global Crude Prices Retreat Below $96 as Gulf Tensions Momentarily Ease
Generative AI Outperforms Human Baselines in Landmark Global Creativity Study
NASA Partners With Private Aerospace to Unveil Permanent Lunar Base Architecture
South Korean Equity Markets Surge on Next-Generation Memory Chip Frenzy
×