How much will Rishi’s energy bills handout cost the UK? Huge hidden fees

Rishi Sunak explains why energy rebate is paid per household

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

Soaring energy bills have put many households into a precarious financial position, and after considerable pressure the Chancellor eventually announced a wide-ranging package of financial aid. In the Commons on Thursday, the Chancellor told MPs the Government could not “sit idly by” while families across the country struggled to make ends meet.

Among the support on offer, the eight million lowest income households will receive a one-off grant payment of £650 to help with energy bills.

All UK households will receive an additional payment of £200 on top of the £200 issued via council tax reductions earlier this year.

Across all the support, almost all of the eight million most vulnerable households will in total receive at least £1,200 in support.

But despite the wide-ranging support, many have raised the question of whether the UK can afford to take such bold measures, even in a time of crisis, particularly after the furlough scheme put into place throughout the coronavirus pandemic.

But Mr Sunak promised the support would only be temporary, saying: “Fiscal support should be timely, targeted, and temporary.

“Timely, because we need to help people when the shock is at its worst.

“Targeted, because unconstrained stimulus will make the problem worse.

“And temporary, because if we do not meet our fiscal rules, and ensure the public finances are resilient in the longer run.”

How much will it cost the UK?

Overall, the support package will cost the UK £21 billion.

Announcing the measures in the House of Commons on Thursday, the Chancellor told MPs it was worth £15 billion, but officials later conceded there was a hidden £6 billion cost to the announcement, taking it to £21 billion.

Over the next five years, the original £200 rebate for energy bills – which was announced in February, and doubled and turned into a grant by the Chancellor on Thursday – will no longer be paid back.

Why Sue Gray admits there could’ve been even MORE parties [INSIGHT]
Rishi Sunak announcement: Full list of handouts for Britons [EXPLAINER]
Rees-Mogg tells Rishi Sunak no tax ‘economically cost-free’  [REPORT]

The scheme will be partially funded by a windfall tax on energy companies, which have posted huge profits since the worldwide energy crisis began in 2021.

The “temporary targeted profits levy” will raise about £5 billion of revenue for the Treasury, and will be phased out when energy prices drop again.

Ministers remainrf divided on a windfall tax, with Business Secretary Kwasi Kwarteng repeatedly warning of the impact on future investment in the energy sector.

But despite some ire within the Cabinet, the Chancellor has failed to rule out another package of support later in the year, given that the energy price cap is predicted to rise by a further £800 in October.

Mr Sunak insisted he remained a “fiscal conservative” and was committed to managing the public finances “responsibly”, but he refused to rule out another emergency package next year.

He said on the Today programme: “People can judge me by how I’ve acted over the last couple of years,” he told the Today programme.

“I’ve always been prepared to respond to the situation on the ground, what’s happening to the economy, what families are experiencing, and making sure we’ve got policies in place to support them through that.

“I do want people to be reassured and confident that we will get through this.

“We will be able to combat and reduce inflation, we have the tools at our disposal, and after time it will come down.”

Source: Read Full Article