Worcester families will benefit from government support following an announcement by Chancellor of the Exchequer Rishi Sunak. The support comes in the form of a £200 rebate that will be repaid in instalments when energy costs fall again and a further non-repayable rebate of £150 for the households most in need of support.
The Energy Bills Rebate will provide around 28 million households across the UK with an upfront discount on their bills worth £200. Energy suppliers will apply the discount to domestic electricity customers from October, with the Government meeting the costs. The discount will then be automatically recovered from people’s bills in equal £40 instalments over the next five years. This will begin from 2023, when global wholesale gas prices are expected to come down.
Households in England, which are in council tax bands A-D, will also receive a £150 rebate. The rebate to bills will be made directly by local authorities from April. This will not need to be repaid. This one-off payment will benefit around 80 per cent of all homes in England and is £1 billion more generous and more targeted towards lower-income families than a VAT cut on energy bills.
On top of this discount, discretionary funding of £144 million will also be provided to support vulnerable people and individuals on low incomes that do not pay Council Tax, or that pay Council Tax for properties in Bands E-H.
The support package comes after energy regulator Ofgem today announced an increase to the energy price cap as a result of the soaring global wholesale price of gas, which has quadrupled in the past year. This will see almost a £700 increase in energy bills for the average household from April 1 - but, as a result of the targeted Energy Bills Rebate, the vast majority of households will receive £350 to reduce this cost.
Worcester MP Robin Walker said:
“The UK is recovering from the pandemic which had a major impact on the national economy, but this in turn is causing inflationary pressures here as well as worldwide. Much of this inflation is being driven by the rising cost of energy due to increased demand and this is leading to greater pressure on the cost of living for families in constituencies like mine.
“We have already taken a number of measures to help with the cost of living including reducing the Universal Credit taper rate, increasing the National Living Wage, freezing fuel duty for the twelfth year in a row, and launching a £500 million Household Support Fund to help the lowest-income households with their bills.
“This package of measures targets support where it is needed, by providing a rebate on energy bills, helping lower and middle income families through a council tax rebate, and providing councils with additional funding to allocate on a discretionary basis.
“I note that some have called for an alternative approach, such as taking advantage of our place outside the EU restriction on cutting VAT on energy, but that proposal would be less advantageous to Worcester residents, particularly those on middle incomes. This package provides more generous support to most households faster than other proposals.
Chancellor of the Exchequer Rishi Sunak said:
“Right now, I know the number one issue on people’s minds is the rising cost of living.
“That’s why the Government is stepping in with direct support that will help around 28 million households with their rising energy costs over the next year.
“We stood behind British people and businesses throughout the pandemic and it’s right we continue to do that as our economy recovers in the months ahead.”