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."
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel