We are all acutely aware of the rising cost of living. Driven largely by the energy crisis and expensive fossil fuels, there is an urgent need to support those impacted. Today, the 26th of May, the chancellor made a statement in parliament outlining a package of additional measures to help people as costs rise.
I know a lot of our customers will have questions about what’s been announced, and what it may mean for them. Here is what we know.
- The £200 payment to all households already planned for this autumn will now be increased to £400. It will also be changed to a grant, so billpayers will not need to pay it back as initially proposed.
- Eight million people on means tested benefits will receive an extra £650. This will be delivered in two payments. The first will come in July, and the second in autumn, paid by the Department for Work and Pensions.
- Eight million pensioner households that receive the Winter Fuel Payment will get an extra £300.
- Six million people who receive non-means tested disability benefits will receive £150 from September.
- The Household Support Fund (administered by Local Authorities) will be extended by £500m by October to help those on housing benefits who aren’t in the above categories.
- Finally, subject to review, benefits may be uprated against this September’s Consumer Pricing Index, and the triple lock will apply for the state pension.
What does this mean for me?
Most households will receive at least £550 to help with their bills. For the majority of pensioners, this will be £850. The most vulnerable households, meeting all of the criteria above and including the council tax rebate of £150 which began in April, will receive up to £1200.
How will this be paid for?
As many people have been calling for, there will be a 25% windfall tax on the profits of oil and gas companies. This will increase the headline rate of tax on these profits from 40% to 65%.
We think this is a strong package of measures which will deliver much needed support to those who would otherwise struggle, not just with their energy bills, but with many other rising living costs.
However, there is more to be done. We know that energy costs are increasing because of our over-reliance on expensive, volatile fossil fuels. And we simply cannot afford for a crisis like this to happen again.
Increased investment in cheap, home-grown renewable energy will reduce the amount of gas we will need to buy and bring down bills in the long run. Just last week, the government failed to take the opportunity to invest further in new wind and solar.
Alongside this, we need deep, rapid investment in energy efficiency measures in our homes and businesses, which would reduce bills by hundreds of pounds not just this winter, but permanently.