Lib Dems call for parliament to be recalled to pass bill scrapping rise in energy price cap

The Liberal Democrats are demanding parliament be recalled from its summer recess to pass a law to scrap impending hikes in energy prices.

The party has drafted legislation to cancel the price cap rise, which is due to be announced at the end of the month and coming into force in October.

The Energy Price Cap Increase (Cancellation) Bill would make Ofgem maintain the existing rates, saving households an average of £1,400 this year, the Lib Dems said.

The bill would also make the government produce a report into extending and backdating the windfall tax on oil and gas company profits to help cover the cost.

Liberal Democrat leader Ed Davey said: “People are worried sick about the next staggering rise in energy bills which is just round the corner.

“Yet we are faced with a deafening silence from the prime minister and chancellor, while both Conservative leadership candidates have failed to come up with a bold plan to solve this crisis.

“The Liberal Democrats have prepared legislation that is ready and waiting to implement our plans to scrap the energy price rise. Parliament must be recalled now so we can pass this law as soon as possible.”

The move comes after a dire new forecast predicted energy bills will hit £4,200 by January.

Energy consultancy firm Cornwall Insight said bills are now expected to reach approximately £3,582 a year for the average household from October – up from the £3,359 predicted earlier this month. That compares to the price cap last October of £1,277.

From January, the amount is expected to hit £4,266 before continuing to rise in April to £4,427 – the previous forecast was for £3,729 in April.

Last night, Mr Davey set out how he would deal with the energy crisis, saying a new “energy furlough scheme” should be brought in and the government should absorb the £36bn cost of the hike.

Speaking after the latest energy price forecast, Mr Davey said: “Every day that goes past without any answers from this Conservative government creates more angst amongst those worried about how they will pay the bills this winter.

“We need to reassure families and pensioners now by introducing measures to protect them from this social and economic catastrophe.”

Tory leadership contenders Liz Truss and Rishi Sunak are facing mounting pressure to do more to tackle the cost of living crisis.

The foreign secretary has proposed reversing the rise in the National Insurance tax and removing the green levy on energy, while the former chancellor has announced a VAT cut on energy bills and says he will offer more direct support through savings made by whittling down Whitehall.

But poverty campaigners say the measures are not targeted at those who need help most.

The independent Joseph Rowntree Foundation is calling for both candidates to bring forward a large support package that will double the help for the worst-off families.

Former Labour leader Gordon Brown has suggested capping energy bills, reforming the welfare system, and changing the current Windfall tax to extract more money out of oil and gas firms, after a report he commissioned found families are already up to £1,600-a-year worse off because of the cost of living crisis – even after government help is taken into account.

Meanwhile poverty expert Professor Donald Hirsch, who wrote the report, told Sky News he would like to see an emergency increase in Universal Credit.

Outgoing Prime Minister Boris Johnson ruled out fresh measures yesterday, saying any new support will be for his successor to decide.

But campaigners say new help can’t wait until September as calls grow for the PM to meet with Mr Sunak and Ms Truss to find a way forward.

However, Rishi Sunak supporter Mark Harper MP told Sky News earlier he did not think a meeting between Mr Johnson, Mr Sunak and Ms Truss was going to happen because of their “fundamental difference of opinion”.