Ofgem chief executive Jonathan Brearley revealed his latest estimate for the price cap as he gave evidence to MPs on the Business Committee
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Struggling Britons were today warned they face another near-50 per cent hike in energy prices in October – as Boris Johnson held a crisis Cabinet on the cost of living. 

Ofgem chief executive Jonathan Brearley revealed his latest estimate for the price cap as he gave evidence to MPs on the Business Committee.

He said that although the figures were ‘uncertain’, the situation has deteriorated and the expectation for the new level was £2,800 for a typical family – compared to £1,972 at the moment. Before April it was just £1,277.

The grim message will heap pressure on the PM to announce more help for families struggling to get by as inflation spirals.   

However, ministers still appear to be squabbling over whether to impose a windfall tax on the surging profits of energy firms, amid Tory calls for immediate tax cuts.

Chancellor Rishi Sunak has said he is waiting for the situation on energy bills to become clearer before taking action – a condition that might now have been fulfilled. However, No11 sources said he is still ‘working through policy options’ and stressed that October is five months away.     

There are claims today that Mr Sunak is drawing up a levy that would target renewable electricity generators as well as oil and gas producers to increase the revenue raised. 

Meanwhile, the Treasury and Downing Street have struck different stances over the idea of restoring the £20-a-week uplift to Universal Credit. No10 insisted yesterday that nothing is off the table, while Chief Secretary Simon Clarke dismissed the prospect. 

Official figures today showed the government tax take soaring 12 per cent year-on-year.

The Treasury raked in £50.2billion in April – £5.5billion higher than the same month last year after the national insurance hike came in.

The data also showed the cost of the £150 council tax rebate trumpeted by Mr Sunak previously has already been clawed back from other local government spending. 

Mr Brearley told MPs: ‘I am afraid to say conditions have worsened in the global gas market since Russia’s invasion of Ukraine. Gas prices are higher and highly volatile. At times they have now reached over 10 times their normal level

‘I know this is a very distressing time for customers but I do need to be clear with this committee, with customers and with the government about the likely price implications for October.

‘Therefore later today I will be writing to the Chancellor to give him our latest estimates of the price cap uplift.

‘This is uncertain, we are only part way through the price cap window, but we are expecting a price cap in October in the region of £2,800.’

Ofgem chief executive Jonathan Brearley revealed his latest estimate for the price cap as he gave evidence to MPs on the Business Committee

Ofgem chief executive Jonathan Brearley revealed his latest estimate for the price cap as he gave evidence to MPs on the Business Committee

The grim message will heap pressure on the PM (pictured holding Cabinet today) to announce more help for families struggling to get by as inflation spirals

The grim message will heap pressure on the PM (pictured holding Cabinet today) to announce more help for families struggling to get by as inflation spirals

The Treasury raked in £50.2billion in taxes in April - £5.5billion higher than the same month last year after the national insurance hike came in

The Treasury raked in £50.2billion in taxes in April – £5.5billion higher than the same month last year after the national insurance hike came in

Mr Johnson was flanked by civil service chief Simon Case (left) and Rishi Sunak (right) as he held Cabinet today

Mr Johnson was flanked by civil service chief Simon Case (left) and Rishi Sunak (right) as he held Cabinet today

Giving evidence to the same committee afterwards, Business Secretary Kwasi Kwarteng said bill payers had to ‘wait and see’ what extra help would be on offer to cope with rising energy costs.

‘Both the Prime Minister and the Chancellor have said that there will be further announcements in respect of giving assistance to people,’ he told MPs.

He told the Business, Energy and Industrial Strategy Committee that £9.1 billion had already been allocated to help with rising bills. But faced with the prospect of the price cap rising to £2,800, Mr Kwarteng was pressed on what more could be offered.

‘What we see now isn’t the full picture. Both the Prime Minister and the Chancellor have said there is more to do and we have to just wait and see what is forthcoming.’

He added: ‘It’s a difficult time, we all know that people are under huge stress. We also know that the cost of living is a very real issue and nobody is suggesting that the Government can pay the entirety of the energy bill.

‘What we are committed to is giving support and that’s what we are doing.’

Responding to the eye-watering cap estimate, shadow chancellor Rachel Reeves said: ‘This is extremely concerning and will cause huge worry for families already facing soaring bills and rising inflation.

‘How many more alarm bells does the Chancellor need to hear before he acts? The government have got to get a grip on this crisis and to protect families and our economy.

‘Yet again, Labour calls urgently on the government to bring forward an emergency budget, with a windfall tax on oil and gas producer profits to lower bills for families.’

Inflation has already soared to its highest level for 40 years, at 9 per cent in April, due to eye-watering increases in energy tariffs, and is forecast to reach double-figures by the end of the year before falling back.

The Office for National Statistics (ONS) said government borrowing, excluding state-owned banks, stood at £18.6billion last month – lower than forecast and down by £5.6billion from a year ago.

The figure was still the fourth highest April borrowing since records began and £7.9billion more than in April 2019 before the pandemic struck.

But the data also showed borrowing was revised down by £7.2billion for the financial year to the end of March 2022, to £144.6billion.

While the 2021-22 outturn is the third highest financial year for borrowing on record and above the £127.8billion predicted by the Office for Budget Responsibility (OBR), it may offer some much-needed wiggle room for the Government as it faces growing calls to help cash-strapped households.

PAYE tax income was up from £15billion in April 2020 to £17.8billion this year, while VAT raised an extra £1.6billion. Compulsory social contributions rose by £1.4billion.  

The figures showed that interest payments on the Government’s borrowing stood at £4.4billion last month, which was lower than the £4.9billion seen a year earlier.

However, interest payments are expected to soar, due to rocketing levels of the Retail Prices Index measure of inflation used on Government debt payments, with June data set to show the full scale of the recent jump in inflation.

Mr Sunak said: ‘While we are doing what we can to help families deal with rising prices, inflation is also pushing up our spending on debt interest – which is expected to reach £83billion this year.

‘We must take a balanced and responsible approach to support people now, while also not burdening future generations, and we’re on track to drive public debt down by 2024-25.’

The ONS figures include the £3billion cost of the recent council tax rebate, which offered £150 to many households across the UK to help with soaring energy bills.

But that cost was ‘offset by reductions in other areas of expenditure, including subsidies and transfers to local government’. 

The tax take is now higher than before the pandemic

The tax take is now higher than before the pandemic 

The ONS also estimates that April’s 1.25 per cent National Insurance rise will bring in around £18billion this financial year.

Public sector debt, excluding public sector banks, was £2.35trillion at the end of April, up by £179.1 billion on a year earlier and around 95.7 per cent of gross domestic product (GDP), according to the ONS.

Helen Morrissey of investment firm Hargreaves Lansdown said: ‘We continued to see the benefits of high employment levels with income tax and national insurance receipts continuing to rise reflecting a 4.9 per cent boost in the number of paid employees. 

‘This is a hugely positive trend but there are darker clouds gathering on the horizon as we expect to see the impact of the 1.25 percentage point rise in National Insurance start to factor in the data in the coming months. 

‘As the cost-of-living crisis continues to bite it will be an extra cost many people can ill afford.’

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