Rishi reveals £9bn lifeline – but Scots families kept in dark

RISHI Sunak threw cashstrapped families a £9billion cost of living lifeline yesterday – but admitted it would be nowhere near enough to offset a £700 spike in energy bills.

The Chancellor said every household would get a £200 ‘rebate’ on energy bills to ‘take the sting’ out of yesterday’s decision to raise the energy price cap to almost £2,000.

He also unveiled a £150 council tax rebate for almost 20million households south of the Border living in properties rated Bands A-D. But Scots families remain in the dark over whether they will be given a council tax rebate.

While Mr Sunak’s energy rebate will benefit Scotland directly, Nicola Sturgeon refused to commit to using the £290million handed to the Scottish Government in Barnett consequentials to ease the council tax burden.

The Chancellor warned that the energy rebate would be ‘clawed back’ via a £40 surcharge on energy bills for each of the next five years. Mr Sunak also ruled out scrapping VAT on energy bills, and rejected calls to postpone the rise in national insurance in April. He admitted the £350 package would cover barely half of the rise in energy bills alone.

Mr Sunak said it would be ‘wrong and dishonest for me to say to people that we don’t have to adjust to higher energy prices – we are unfortunately going to have to’.

He added: ‘What we can do is take the sting out of a significant price shock for millions of families by making sure that the increase in prices is smaller initially and spread over a longer period.’

It came less than an hour after a bombshell announcement from Ofgem that the energy price cap will rise from April by £693 a year to £1,971 for a typical household – a jump of 54 per cent.

Mr Sunak said the ‘proportionate, fair, targeted and responsi

‘Take the sting out of price shock’

ble’ package was designed to help address the ‘anxiety people feel about rising energy bills’ and he defended the ‘difficult’ decision to press ahead with a hike in national insurance.

The £12billion-a-year tax rise dwarfs the value of yesterday’s rescue package.

The Chancellor said it was needed to clear the NHS waiting list, which he described as people’s ‘number one priority’.

Speaking at a Downing Street press conference, Mr Sunak insisted, however, that he still aimed to cut taxes before the election, saying: ‘I feel confident to be able to deliver that pledge.’

Charities, including Citizens Advice, questioned the way the rescue scheme is structured, saying it fails to target those most in need.

Some 17.5million households on the standard default variable tariff will see bills rise by £693 to £1,971, based on typical use. But the figure for the 4.5million on prepayment meters – including many of the poorest families and pensioners – will rise by £708 to £2,017.

There are fears typical bills could go up again to as much as £2,300 from October 1, just as families turn on their central heating for winter.

Millions of households are already rationing heat and light and the hikes, due to come into effect on

April 1, are set to make the situation worse.

Dame Clare Moriarty, chief executive of Citizens Advice, criticised Mr Sunak’s plans, saying: ‘This is a strange, complicated and untargeted package of measures. If the Government is serious about helping families facing the desperate choice between heating and eating it should use the benefits system.’

Finance Secretary Kate Forbes suggested that part of the £290million windfall has been promised by the Scottish Government to councils, already handed an extra £120million to try to plug an enormous budget black hole.

She said in a tweet ‘we’d been told there would be additional consequentials (hence why we could allocate a further £120million to local gov)’. But Miss Sturgeon

failed to commit to a council tax rebate and is yet to outline what measures are being considered. She said the Chancellor’s pledge ‘sounded like welcome steps to help mitigate [the rising price cap] but steps that, in my view, do not go far enough’.

She added: ‘They seem to offer around £350 of help against energy bill increases of around £700.

‘I don’t yet know what the position on consequentials will be, but I give a commitment here that... every single penny of them will go in Scotland to helping people deal with the cost of living crisis.’

‘Complicated and untargeted’