Chancellor Rishi Sunak is planning two more moves to help millions of people pay for soaring gas and electricity bills, according to reports. Mr Sunak will increase the warm home discount and cut taxes so homes can more easily afford to pay for gas and electricity.
According to The Times, the Treasury is looking at increasing the warm home discount - which has given people £150 off their bills - up to a one off payment of £600. And Mr Sunak is also looking at cutting either income tax by 1p or VAT. The warm home discount was introduced in 2011 and gives the poorest households a discount on their heating bills. It is assessed differently in different parts of the UK.
Treasury officials have drawn up a range of options, including a one-off increase of £300, £500 or even £600 to help households to cope with soaring energy prices. In the past, people in Wales and Scotland have been eligible for the warm home discount if they spend more than 10% of their household income on energy costs. In England people qualify if they have a low income and high household costs.
Energy bills will be increased again this October. Fuel poverty charity National Energy Action (NEA) has criticised the Government response over the cost-of-living crisis as it cautioned that many vulnerable people are facing long waits for extra financial support. The charity reported that those people who do not pay council tax via direct debit have been affected and are waiting for £150 tax rebate payments.
It comes days after food bank charity Feeding Britain called for Ofgem to intervene amid fears that vulnerable families have turned off their electricity and gas to avoid being pushed further into destitution. Councils were due to start paying council tax rebates to households from last month when the energy price cap increased by £693 to £1,971 for the average household.
Adam Scorer, chief executive of the NEA, said: “The Government’s response to the energy crisis has been wholly inadequate so far. We’ve got serious concerns about the way the council tax rebate will be implemented.
“Councils across the country will have their own way of administering the scheme, creating a postcode lottery for struggling households.”
Mr Scorer also warned that an “already dire situation” will get worse when the price cap rises again in October and temperatures drop again unless the Government provides further financial support. The latest predictions from Cornwall Insight, a consultancy, is that the cap could rise to £2,595 in October, and stay at about £2,300 until April 2024. However, these predictions are based on early data.
