UNIVERSAL support for energy bills will not be extended past spring 2024, Jeremy Hunt has told MPs.
The Chancellor warned on Wednesday that people will “have to take responsibility for their energy bills” and reduce their usage or there will be a “huge additional burden on taxpayers”.
He told the Commons Treasury Committee the scheme helping households through Russia’s war in Ukraine will cost £80bn this year and “possibly around half that next year”.
The Chancellor extended the support until April 2024, but increased the cost the average household will pay from £2,500 to £3,000 from April.
But he suggested it will be further scaled back in the future, with support instead being focused on the most vulnerable.
“In the long run we’re going need everyone to help us crack this problem if we’re not going to have a huge additional burden on taxpayers which ultimately will lead to the kind of high taxes I certainly don’t believe are desirable in the long run,” he said.
“We will always be there to help poorer households, the way we do that will change.
“But for most people we need you to play your part in reducing our energy dependency on what Putin choses to do in Ukraine, that’s why we’ve got this national ambition to reduce energy consumption by 15%.”
Mr Hunt said households would save themselves around £500 in the years to come if they hit that target and that people “need people to change their behaviour”.
“But we are saying to people that in the end everyone is going to have to take responsibility for their energy bills and they’re going to have to think about how they’re going to reduce their energy consumption,” he said.
The Chancellor also told the committee that he had asked the Treasury to look into how much could be raised by closing the controversial non-dom tax loophole.
Mr Hunt and Rishi Sunak have come under fire for refusing to abolish the arrangement for those who live in this country but pay no UK tax on their offshore income, with Labour accusing the pair of shielding the super-rich from contributing their fair share.
Mr Hunt has disputed suggestions that the move could raise £3bn per year, arguing he would rather wealthy people “stayed here and spent their money here” than move abroad.
But he admitted last week he did not get Treasury estimates on the financial impact of ending the status.
The Chancellor has now said he has asked officials to look into how much could be raised by closing the loophole, as he cautioned he does not want to sign off any action that “inadvertently loses us more money than we raise”.
He previously pointed to Treasury uncertainty around the figures “being bandied around”.
He denied the suggestion there was “one rule for the rich and another rule for everybody else”.
Asked how much it would raise to close the non-dom loophole, he said: “Well, I’ve asked the Treasury to look into that.”
Presented with some estimates for the value of the move, he said “I’ve asked for that to be looked at. My point was different actually.
“It is that I understand that non-doms pay in tax… all the taxes that they do pay, around £8 billion of tax a year. So I want to make sure that wealthy foreigners pay as much tax in this country as possible.
“Ireland has a non-dom regime. France has a non-dom regime. These are people who are highly mobile, and I want to make sure that we don’t do anything that inadvertently loses us more money than we raise.”
The Institute for Public Policy Research estimates that abolishing the non-dom status would raise £3bn per year.
In his autumn statement last Thursday, Mr Hunt hiked taxes by £25bn including with a freeze on the income tax threshold, meaning millions will end up paying more.
Mr Sunak’s wife, Akshata Murty, was forced to say in April she would pay UK taxes on all her worldwide income after they faced criticism over her non-dom status.
It was estimated that Ms Murty, a fashion designer and the daughter of an Indian billionaire, could have saved up to £20m in UK tax through the arrangement.
Sir Keir Starmer has accused the Government of having “gone after working people” with tax hikes while doing “nothing about non-dom status”.
Mr Hunt froze the thresholds on which income tax rates are paid in the autumn budget, in a move that will drag workers into higher bands as inflation runs high.
He told the committee he did that because “over time, when we can afford to, I want to reduce those headline rates”.
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