Rishi Sunak Announces Cuts To Council Tax And Energy Bills To Tackle Cost Of Living Crisis

The Chancellor said 28 million households will benefit as a result of the £9bn support package.
Rishi Sunak has been under pressure to tackle soaring bills.
Rishi Sunak has been under pressure to tackle soaring bills.
Stefan Rousseau via PA Wire/PA Images

Millions of families will have their council tax bills slashed by £150, while every household will see their energy costs cut by £200, Rishi Sunak has announced.

The Chancellor has been under huge pressure to come up with measures to address public anger at soaring gas and electricity bills coupled with rising inflation, interest rates and an imminent hike in national insurance.

The need for action was thrown into sharp focus again this morning when Ofgen announced that the energy price cap was being set at £1,971- a rise of £693.

Addressing MPs in the House of Commons, Sunak said: “Without government action, this would be incredibly tough for millions of hardworking families, so the government is going to step in to directly help people to manage those extra costs.”

Under the Chancellor’s plan, energy firms will receive state-backed loans underwritten by taxpayers allowing them to cut bills by £200.

Under the “rebate and clawback” scheme, the companies will recoup the money from their customers by adding £40 a year to bills for the next five years.

Meanwhile, properties in council tax bands A to D will receive a £150 rebate on their bills from April.

The Chancellor said the move would benefit around 80 per cent of homes in England.

Local authorities will also share a £150m discretionary fund to help low income families living in higher council tax band homes, Sunak said.

The Chancellor said around 28 million households will benefit as a result of the £9bn support package.

He said: “Our plan allows us to provide more generous support faster to those who need it most.

“It is fair, it is targeted, it is proportionate. It is the right way to help people with the spike in energy costs.”

However, Sunak dismissed Labour’s calls for VAT on fuel bills to be cut, arguing that it would disproportionately benefit the well-off and so was unfair to those on low incomes.

But Shadow Chancellor pointed out that pro-Brexit Conservatives had said that removing VAT from fuel bills was one of the main benefits of leaving the EU.

She said: “I would have thought that the Prime Minister with his unblemished record of integrity would defend the commitments he made but instead it’s another pledge on to the bonfire of broken Tory promises.”

Reeves added: “The Chancellor wants to load costs on taxpayers with a buy now, pay later scheme – while Labour will keep bills low with a windfall tax on North Sea oil and gas producers with booming profits.

“In the midst of a cost of living crisis, the Government’s proposals will leave families in Britain paying hundreds of pounds more as a result of the breathtaking rise in energy prices. It will be of little comfort to many.”


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