REEVES' BUDGET TO HELP WITH COST OF LIVING

Average bill cap up to £1758 a year But there are hopes of a 5% VAT cut

- BY GRAHAM HISCOTT

HOPES are growing that Labour will help millions of struggling households with their energy bills in next week's Budget.

Regulator Ofgem yesterday confirmed its price cap for 34million energy accounts will rise again in January to an average £1758 a year, dashing forecasts of a much-needed drop.

But speculation is mounting Chancellor Rachel Reeves will ditch VAT on bills, saving a typical customer £84 a year.

The spiralling price of gas and electricity has compounded the cost-of-living misery for many.

But pressure is growing for Reeves to go further, with consumer champion Martin Lewis among those urging the Government to shift policy costs from bills on to general taxes instead.

Policy costs include things like renewables obligations, energy company obligation, Warm Home Discount, feed-in tariffs and the new Sizewell C nuclear power plant in Suffolk.

The MoneySavingExpert founder said: "We have to question why we lump all these policy costs on electricity bills - Warm Home Discount, debt forgiveness, renewables.

"It's these policy costs that are now the key driver of predicted future price rises and are making an ever bigger chunk of energy bills.