Energy bills in the UK are poised to be slashed by hundreds of pounds this winter as part of a £10 billion package to assist people cope with rising prices.
The government is scrapping a plan to pay consumers £200 off their bills starting in October, with the money paid back over five years. Instead, according to the BBC, the amount will be increased, potentially doubled, and will not have to be repaid.
One-time payments to some of the most disadvantaged households, as well as another drop in fuel VAT, could be announced.
The funding, which will be revealed tomorrow by Chancellor Rishi Sunak, is believed to be largely funded by a £7 billion windfall tax on oil and gas companies.
It comes a day after Sue Gray’s damning report on Downing Street lockdown parties, and it comes amid mounting pressure on the government to do more to help people cope with the economic downturn.
Labour has advocated for a windfall tax on energy companies that have achieved record profits, thanks in part to Russia’s invasion of Ukraine.
But, until now, the government has resisted requests to apply the one-time charge, saying that it would discourage energy companies from investing in the UK.
The prime minister, though, is said to have suddenly sided with Mr Sunak, who had been pressing for the tax.
Proposals to tax profits from other electricity generators, such as certain older wind farms and nuclear plants that have experienced windfall gains, have been shelved.
Companies that expand their investment in the UK may be eligible for a tax break on the higher tax.
The Treasury said the government recognized “that individuals are grappling with rising prices” and that Mr Sunak had made it “clear that our approach will develop as the situation evolves.”
The news of more assistance comes after the UK’s energy regulator, Ofgem, warned earlier this week that the average family energy bill would increase by £800 in October, increasing the annual price to £2,800. In April, bills had already climbed by an average of £700.
According to Ofgem, this may put 12 million families in fuel poverty. The majority of people living in council tax categories A-D in England have already received a £150 rebate on their bills.
