Rishi Sunak’s £15bn cost of living package ‘averts the darkest of outcomes’

British Chancellor of the Exchequer Rishi Sunak speaks at a statement on the economic update session, at the House of Commons in London, Britain March 23, 2022. UK Parliament/Jessica Taylor/Handout via REUTERS  ATTENTION EDITORS - THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. MANDATORY CREDIT. IMAGE MUST NOT BE ALTERED.
Rishi Sunak announced a £15bn package of measures on Thursday to help tackle the cost-of-living crisis. (Reuters)

A leading energy charity has said Rishi Sunak's £15bn package to ease the cost-of-living crisis has averted "the darkest of outcomes".

Soaring inflation and rocketing energy bills have left millions of Brits struggling to pay for essentials, with inflation hitting the highest level seen for decades at 9%.

Read more: Windfall tax: What is the policy announced by Rishi Sunak?

After months of pressure and criticism for not doing more, on Thursday the chancellor announced a new package of measures.

File photo dated 15/10/21 of shoppers in a supermarket. Shop prices are up 2.7% on last year marking their highest rate of inflation since September 2011, figures show. The impact of rising energy prices and the conflict in Ukraine continued to feed through into April's retail prices, with no sign of them abating, according to the BRC-NielsenIQ Shop Price Index. Issue date: Wednesday May 4, 2022.
Inflation has hit 9%, the highest seen for decades. (PA Images)

Sunak announced:

  • Eight million households on benefits will receive a one off £650 payment

  • Every household will receive £400 towards their energy bills, with the £200 repayable 'discount' scrapped

  • Pensioners will receive a £300 cost of living payment

  • Non-means tested disability benefit claimants with receive a £150

  • An additional £500m will be added to the Household Support Fund

Much of the initial reaction the announcements has been positive, with experts and economists welcoming the new measures.

British Chancellor of the Exchequer Rishi Sunak leaves Downing Street, in London, Britain, May 26, 2022. REUTERS/John Sibley
British Chancellor of the Exchequer Rishi Sunak leaves Downing Street, in London, Britain, May 26, 2022. REUTERS/John Sibley

National Energy Action (NEA) said the package offered "hope" to households in fuel poverty.

"The chancellor’s new package today averts the darkest of outcomes, offering some hope to the millions of fuel poor households across the UK." said NEA chief executive, Adam Scorer.

"Millions will still be struggling and the energy crisis is far from over, but a large, more targeted intervention is what was needed ahead of winter. "

Read more: Energy rebate scam: Warning as public targeted with fake Ofgem emails

Richard Lane, charity director of external affairs Richard Lane at StepChange, said the measures will help "reduce the impact" of spiralling energy bills.

The additional £650 of support to households claiming benefits, delivered without bureaucracy, on top of the general support being made available to all households, will really help to reduce the impact of the eye-watering cost of energy,” he said.  

Torsten Bell, director at the Resolution Foundation, said the announcements were "big and very welcome".

Money Saving Expert's Martin Lewis during a joint press conference with Facebook at the Facebook headquarters in London.
Money Saving Expert Martin Lewis described the chancellor's announcements on energy bills as a "good move". (PA)

"Chancellor almost doubles the level of energy support to over £30bn (£15bn extra today), and fills the huge gap in previous announcements with large targeted support for those hardest hit," said Bell.

"Things to quibble with, but this is big and very welcome indeed."

And Money Saving Expert Martin Lewis praised the government's new measures, emphasising the support on energy bills.

"The Loan-Not-Loan is thankfully now dead," said Lewis.

Read more: How to save money: 22 easy cost-cutting tips

"It is now a grant coming off bills. And it is bigger.

"So now all energy bills will be reduced by a flat £400 this October. Good move"

However, some economists said the measures did not go far enough.

“Additional targeted support for the 8 million people on low incomes is the right approach and will help many on the brink,” said Mia Fahnbulleh, director of the New Economics Foundation (NEF).

LONDON, UNITED KINGDOM - MARCH 20, 2022: Shadow Chancellor of the Exchequer Rachel Reeves speaks to the media outside the BBC Broadcasting House in central London before appearing on the Sunday Morning show hosted by Sophie Raworth on March 20, 2022 in London, England. Chancellor Rishi Sunak is set to deliver the Spring Statement at the House of Commons on Wednesday 23 March amid surging cost of living and energy crisis. (Photo credit should read Wiktor Szymanowicz/Future Publishing via Getty Images)
Shadow chancellor Rachel Reeves said the chancellor had accepted Labour's proposals for a windfall tax. (Getty)

“But a one off payment of £650 doesn’t begin to restore the huge hole in social security that has left these families so vulnerable to the cost of living crisis.”

And progressive think tank IPPR said Sunak is "belatedly rising to cost of living challenge" but leaves millions of families uncertain of future and called for a permanent increase to benefits.

The Treasury say the new package of measures will be funded windfall tax on the unexpected profits of oil companies due to market volatility.

Labour criticised the chancellor for ignoring Labour's calls for a windfall tax until Thursday, after months of pressure.

Read more: 800,000 families missing out on up to £2,000 support, government warns

“After five months of being dragged kicking and screaming, the chancellor has finally come to his senses, U-turned, and adopted Labour’s plan for a windfall tax on oil and gas producer profits to lower bills,” said shadow chancellor, Rachel Reeves.

She added: "And they still have no long term plan to grow our economy and pull us out of the mess they’ve got us into.

“Only Labour will tackle the cost of living crisis, grow our economy and make it stronger to protect it from shocks.”

Watch: Rishi Sunak unveils £15bn package and U-turns on windfall tax to help Britons 'hit hard' by cost of living surge