Given the energy price cap will rise by a staggering 54 per cent in the next 12 months, Chancellor Rishi Sunak has announced a series of measures to help lessen the blow for families.
Asian Standard understands Customers paying default tariffs by direct debit will see annual bills rise by £693 from £1,277 to £1,971 per year. The many prepayment customers will see their costs go up £708 from £1,309 to £2,017.
What’s more, the Bank of England has also announced an increase of interest rates from 0.25 per cent to 5 pr cent and it has forecast inflation to hit a huge 7¼ per cent in April. Also remember, national insurance contributions will rise by 1.25 per cent, creating even more pressure for struggling families.
Chancellor Rishi Sunak told the house it would be dishonest to stand up and not say bills will increase. In the light of this, the Government will give the “vast majority” of households £350 of support to remove the “sting” from rising energy crisis through council tax rebates and an upfront discount on bills.
Each energy customer will get an up-front discount on their energy bills worth £200. Energy providers will apply the discount on people’s bills from October, as the Government provides firms with loans worth a total of £9.1 billion to help them cover the discount. Households will repay the discount in £40 instalments over five years.
Rebates of £150 will be provided in April to households in council tax bands A to D. These do not have to be repaid and will benefit 80 per cent of homes in England. Meanwhile councils will receive a discretionary fund of close to £150 million to support struggling house families living in high tax rate homes. They will be able to use the cash to help lower income households in higher council tax bands, and households in bands A-D who are exempt from council tax.
It should be noted devolved nations will be provided with £565 million to help households.
The Chancellor also said eligibility for the Warm Home Discount will be expanded by almost a third. This means three million low-income households will be eligible for the benefit, taking £150 off their electricity bill for winter 2021 to 2022.
The money is not paid directly to customers however, it’s a one-off discount on electricity bills, between October and March.
He said: “The 0pposition may have some soundbites but they certainly don’t have a policy”, adding a windfall tax was “superficially appealing” but risked deterring investment.
Shadow Chancellor Rachel Reeves responded by claiming Mr Sunak’s measures were a “buy-now-pay-later scheme loading up prices for tomorrow.
She added: “High prices as far as the eye can see – this year, next year and the year after that, give with one hand now and take it all back later.
“By lending billions of pounds to energy companies, the Chancellor is gambling that prices are going to fall – but they could go up further in October. What then? Billions more loaded onto people’s bills?”
Labour have suggested Labour the best way to target support would be to extend the Warm Home Discount to nine million households and increase the discount to £400 from £150.