Rishi Sunak announces funding to 'take sting out' of energy bill hikes

·2-min read
Rishi Sunak announces huge rise to energy price cap
Rishi Sunak announces huge rise to energy price cap

RISHI Sunak has announced a state-backed loan in a bid to offset the energy price cap increase.

The Chancellor promised to “take the sting out” of the rise with a funding package which will see 28 million households in Britain get a £200 up-front rebate on their energy bills from October.

The UK Government will provide the cash for this, but it wants the money back so will hike bills by £40 per year over the next five years from 2023 to recoup its cash.

This comes as the energy regulator Ofgem has raised the energy price cap by £693 rising to £1971 for a typical household.

Labour's shadow chancellor, Rachel Reeves, described the plan as a "buy now, pay later scheme that will build up debt for tomorrow".

The average price of a standard energy bill will see a rise of 54% after April 1.

Sunak says the UK Government will step in to help 28 million households in a three-point plan worth around £9 billion.

Around 80% of households in England – those in bands A to D – will also get a £150 council tax rebate in April to help with the cost of energy which will not need to be repaid.

The devolved administrations will receive resultant Barnett consequentials of around £565m, including £290m for the Scottish Government.

The Chancellor said this is aimed to support middle incomes as well as lower incomes, and all in Bands A to D will be eligible.

Local authorities will also be given a discretionary fund of nearly £50m to help households, including those exempt from council tax at all.

He also stated that the Government is expanding eligibility for the warm homes discount.

Sunak stated that the plan will provide 28 million households with “at least £200” and “tens of millions of hardworking families” will have an extra £350 in their pockets.

Responding to the Chancellor's statement, Peter Kelly, Director of the Poverty Alliance, said: "All levels of government have a moral responsibility to protect households that are reaching breaking point, but the measures announced by Rishi Sunak today fail to live up to that responsibility.

"His measures also failed to address the spectacle of energy companies making multi-billion profits while people across the country struggle to heat their homes. A windfall tax is the just and right response to this most stark injustice.

"It is clear, in the inadequacy of his measures, that the Chancellor fails to grasp the severity of the situation facing people across the country."