The UK government is facing mounting pressure to offer support to households as domestic energy bills are projected to rise further. Simultaneously, officials are working towards reducing the country's dependence on gas, which is subject to volatile international pricing.
In the short term, ministers have stated their intention to assist consumers, with promises of further action. A reduction in Value Added Tax (VAT) on electricity bills is scheduled for October, which will lower electricity prices. However, this decrease has been significantly overshadowed by an 8% increase in the price of gas.
During the last budget, some policy-related costs on energy bills were reduced, with the expense shifted to general taxation. Ministers may consider further similar measures, though they could face criticism for merely transferring the financial burden from bills to taxpayers.
The options for immediate relief are limited, and the new chancellor, John Healey, faces difficult choices. Despite numerous calls for assistance, the public finances offer little room for maneuver. All eyes are on Healey's first budget, which is expected soon after the higher autumn energy bills take effect. The government and energy regulator Ofgem are also looking at long-term strategies, including promoting the sale of plug-in solar panels, to move away from reliance on gas.
