Scotland to get an extra £290m when Rishi Sunak unveils plan to help with energy costs

The funding comes as the Chancellor announced a new support package after Ofgem announced that households face a £693 energy bill increase.

Likely to affect 22 million households in Britain, the decision applies to those on default tariff from their energy provider.

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Shortly after the announcement, Sunak promised to “take the sting out” of price hikes.

Chancellor Rishi Sunak spoke in the House of Commons, outlining the government’s support for consumers over rising energy costs after regulator Ofgem announced the energy price cap will rise in April to £ 1971, an increase of £693 for the average household.

He promised that Britain’s 28 households would receive an initial £200 rebate on their energy bills from October.

Sunak also promised a £150 council tax rebate for homes in bands A to D, something he said would cover around 80% of homes in England.

As the council tax system is devolved, devolved governments will receive a total Barnett fallout of around £565m.

This comprises around £290m for the Scottish Government, £175m for the Welsh Government and £100m for the Northern Ireland Executive.

The Chancellor said: “The price cap has meant that the impact of high gas prices so far has predominantly fallen on energy companies.

“So much so that, as a result, some providers who couldn’t afford to cover those extra costs have gone bankrupt.

“It is not sustainable to keep the price of energy artificially low.

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Ofgem price cap: average energy bill to rise by 54%, regulator announces

“For me to be here and pretend that we don’t have to adjust to paying higher prices would be wrong and dishonest.

“But what we can do is alleviate a significant price shock for millions of families by making sure that the price increase is smaller initially and spreads over a longer period.”

Shadow Chancellor Rachel Reeves accused the government of not doing enough. She said: “What does the Government offer? A buy now, pay later scheme increases costs for tomorrow.

“High prices as far as the eye can see: this year, the next and the year after, give with one hand now and take it all back later. The opposite party used to talk about the nation’s credit card, well today we saw the Chancellor force British households to top up their credit cards.

“By lending billions of pounds to energy companies, the Chancellor is betting that prices will fall but could rise further in October. So what? Billions more charged on people’s bills?

“The best way to direct support to those who need it most would be an increase to £400 and an extension to 9 million households of the warm homes discount, as Labor has proposed today. Their current scheme is a pale imitation of Labour, especially for households and retirees with the most modest incomes.

Ofgem Chief Executive Jonathan Brearley had previously defended the price increase.

He added: “We know this increase will be extremely worrying for many people, especially those struggling to make ends meet, and Ofgem will ensure energy companies support their customers in any way they can.”

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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