Autumn Statement: Energy price cap increase dampens Hunt’s ‘tax cuts’ as he denies pre-election handout – live

Millions of householders are set to pay 5 per cent more for their gas and electricity bills after the energy watchdog announced its latest price cap.

Bills for a typical energy user paying by direct debit will rise from £1,834 a year to £1,928, an increase of £94, Ofgem announced on Thursday. The new rates – which come into effect from 1 January – will cause dismay among the millions of people across the UK struggling with the cost of living.

Citizens Advice warned it was already helping record numbers with energy debt and was seeing more people than ever who can’t afford to top up their prepayment meter.

“Prices going up during the coldest part of the year will make life harder for millions of people already struggling to pay their bills,” said Gillian Cooper, director of energy at Citizens Advice.

“Yesterday, the government missed the opportunity to announce extra support for households who desperately need it this winter. The lack of action means far too many households will now be forced to choose between heating and eating this winter.”

Office for Budget Responsibility chair Richard Hughes was asked why the fiscal watchdog was relaxed about the chancellor’s tax cuts in regards to inflation.

The Resolution Foundation said the tax cuts announced by Jeremy Hunt were the largest since 1988.

“In essence, because borrowing is unchanged,” Mr Hughes told a post-autumn statement event by the think tank. “Higher inflation is bringing in more tax revenue. And the Chancellor decided to give that back to taxpayers.”

Asked if inflation could have come down quicker without the tax cuts, he declined to comment, adding: “I only do one forecast at a time.”

Esther McVey has insisted she is “committed to delivering common sense decisions” as opposition politicians teased the Tory MP in the Commons over reports of her new informal title as Rishi Sunak’s minister for common sense.

Labour MP Alison McGovern questioned whether Mr Sunak’s introduction of a minister for common sense was “an admission that you yourself don’t really have any”.

To illustrate the point, shadow minister Nick Thomas-Symonds pointed to the PM’s “struggles using a contactless card at a petrol station, and indeed his impression that private helicopter is the best way to get to Southampton”.

Ms McVey said: “I also have seen the reports in the paper describing me as the minister of common sense. And I appreciate the concept is a difficult one to grasp for the members on the other side of the bench there.

“But I am committed to delivering common sense decisions, such as delaying the ban on petrol and diesel cars, delaying the ban on oil and gas boilers, scrapping HS2 Birmingham to Manchester, reducing the overseas budget, all common sense policies that those on the opposite benches have voted against.”

The government will keep welfare spending under review, Downing Street said while defending the breach of the welfare cap.

The Office for Budget Responsibility forecast that the welfare cap will be bust by £8.6 billion in 2024-25.

Rishi Sunak’s official spokespersonn told reporters: “This is an autumn statement where we’ve made decisions to help those most in need.

“We’ve provided tax cuts through national insurance contribution and we’re helping the most vulnerable through uprating benefits. I think people understand that given there are still challenges caused by the global headwinds that it is right to do so. Obviously, we keep that under review.

“What you’ve seen through the changes introduced through the Department for Work and Pensions is an approach whereby we are getting tougher on those who aren’t taking the support that’s being made available to them and removing their benefits.”

The Chancellor’s decisions in the autumn statement are “a surefire way to end up with debt rising over time”, an economist has said.

Thomas Pope, deputy chief economist at the Institute for Government, criticised Jeremy Hunt’s decision to spend virtually all of the extra money he was forecast to have on Wednesday while accepting higher borrowing at the Budget in March when forecasts were more negative.

Spending all of the “good news” when forecasts could still change was not “a sensible or responsible way of making fiscal policy”, said Mr Pope, adding: “That is a surefire way to end up with debt rising over time if you spend your good news and swallow your bad news.”

The measures in Jeremy Hunt’s autumn statement will help lay the groundwork for the Conservatives at the next election, Conservative MP Sir Robert Syms has suggested.

The Poole MP told the Commons: “It is going to be an interesting year. I suspect most of the speeches in this House are going to look like party political broadcasts about who is doing what and who can do things better.

“But we all know to some extent ‘it is the economy, stupid’, and at the end of the day I suspect in October, November, of next year, it will be whether or not the government continues to make progress as it is making progress and whether people accept that, and they decide to hold on to nurse for fear of something worse, or whether or not they believe the rhetoric of the honourable member [Labour’s Jonathan Reynolds] and others that they can actually do better.”

Downing Street played down concerns that public spending plans for the next parliament will cause yet more damage to public services on a scale similar to the peak of austerity.

Rishi Sunak’s official spokesperson said: “Total departmental spending will be £85bn higher in real terms over the next five years compared to the start of this parliament. Departmental spending will continue to grow.

“You’ve also heard the chancellor talk about the need to improve productivity and to reduce the size of the civil service.”

The official rejected the Resolution Foundation think tank’s assessment that cuts to public spending would be similar in scale to the peak years of austerity.

“I don’t think when departmental spending is significantly increasing that is a claim that adds up”, he said, adding that significant sums are being invested into “priority areas” such as the NHS.

Sir Keir Starmer has said Labour is “ready for an election straight away”.

“The reason for that is because I don’t think that the British public, and the voters, can afford to wait any longer,” he said.

Jeremy Hunt’s tax-cutting triggered speculation about a general election next spring.

Patients are being forced to pay for private eye care or risk going blind as the backlog for NHS treatment soars, a survey of optometrists has found:

Jeremy Hunt’s economic plans have put Britain on course for drastic public sector cuts even more “painful” that the austerity period of the 2010s, top economists have warned: