Energy Price Cap: Rishi Sunak announces council tax rebate to ease pressure of rising energy bills

The news comes as energy provider Ofgem announced this morning that the energy price cap is set to rise to a maximum of £1,971.

This means that energy bills for the average household will increase by £693.

Chancellor of the Exchequer Rishi Sunak stated that households in council tax bands A to D would receive a rebate of £150 in April to help with the rise of living costs.

From April 1, taxpayers will also be hit by a 1.25 per cent rise in National Insurance alongside the rise of inflation.

Mr Sunak said that the rebate is designed to help those on middle and lower incomes.

He added that around 80 per cent of all homes in England will benefit from the discount on their tax bill in April, while all domestic electricity customers will get a £200 discount off their energy bills in October.

The council tax rebate will not need to be repaid, whereas the £200 energy bill discount will need to be repaid over five years.

Councils will be given almost £150m to help lower-income households who live in higher council tax properties and households within bands A to D who are exempt from paying council tax.

The rise of energy bills comes as wholesale gas prices have continued to rise due to a cold winter in Europe, which has put pressure on supplies.

This has caused stored gas levels to be much lower than normal.

The energy price cap sets the maximum figure that can be charged to customers in the UK per year for their electricity and gas bills.

The unit measurement is a kilo-watt per hour and the cap only applies to those who are on a standard variable tariff (SVT), which is usually an energy provider's most expensive tariff.

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Bill Bullen, Founder, and CEO of Utilita Energy said: ‘Today’s announcement of a £693 increase from April 1st will instil fear amongst millions more households, who, until six months ago, were able to afford the energy they needed. Despite the rising price of wholesale energy, a spike of this magnitude could still have been avoided had the regulator not made grave errors, despite suppliers’ warnings.

‘Last summer Utilita submitted a white paper which gave BEIS the blueprint to help every household save as much as a fifth on their energy bills, through smart technology, that all suppliers have the power to provide. Had the Government taken notice, and acted, all households would be on their way to making vital savings by now, but instead, the Government is introducing ill-targeted financial measures that won’t go far enough.’

A message from the Editor, Mark Waldron

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