Today (26 May 2022), Chancellor Rishi Sunak announced a series of cost of living measures in response to spiralling energy rises.
Earlier this week (24 May 2022) Ofgem announced the price cap could rise to an average of £2,800 per year, meaning monthly bills would have risen from £106 to £233 in a year. National Energy Action’s Chief Executive Adam Scorer said, at the time:
“Ofgem’s warning that the price cap will rise again by over £800 in October will strike terror into the hearts of millions of people already unable to heat and power their homes. It will plunge households into deep, deep crisis. The financial, social and health impacts are unthinkable.”
Less than 48 hours later Rishi Sunak unveiled measures to help households with the high cost of energy this winter, as well as a windfall tax on oil and gas companies to raise £5bn. These are:
Extra targeted support
- People on lowest incomes/means-tested benefits – 8 million households – will receive a one-off ‘cost of living payment’ of £650, totalling £5 billion, to be paid in July and Autumn directly to bank accounts.
- Pensioners – 8 million – who are in receipt of Winter Fuel Payment will receive a one-off pensioner cost of living payment of £300.
- Disabled people – 6 million in receipt of non-means-tested disability benefits – will receive a one-off disability payment worth £150. Many will also receive the means-tested benefits £650 payment, so a total of £800 which will offset the average price increase from October.
- Household Support Fund will be extended by £500 million from October and there will be legislation to extend it to all devolved nations.
- One-third of all households will benefit from the cost-of-living payments
Universal support
- £200 rebate announced in February will be doubled to £400 and will be a grant, which means it doesn’t need to be paid back.
They claim the total value of new measures is £15 billion and the total package of support since February is £37 billion, with 75% going to vulnerable households.
They also claim that the majority of households will receive £550 (£400 rebate and the £150 council tax rebate paid from April), while pensioners will get £800 and households on means tested benefits will receive £1200 in support.
Adam Scorer, Chief Executive of National Energy Action (NEA) says:
“By October the average energy bill was predicted to more than double from last year. This vast increase would have pushed millions of households into destitution, turning to desperate measures to stay warm at home. Without additional support, we were facing an utterly disastrous winter. The Chancellor’s new package today averts the darkest of outcomes, offering some hope to the millions of fuel poor households across the UK.
“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.
“The Government urgently needs to plan for energy prices to remain high for the longer term. This must include a social tariff, setting an affordable price of energy for the poorest households. And there must be additional effort into making the homes of fuel poor households more energy efficient, making them more resilient to the sort of price shock that they are currently shouldering.”
