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As part of a £10 billion package to help families cope with rising prices, UK homeowners are likely to save hundreds of pounds on their energy bills this winter.
The government is scrapping a plan to give consumers £200 off their bills starting in October, repayable over five years. Instead, according to the BBC, the amount will be increased, potentially doubled, and no repayment would be required.
One-time payments to some of the most disadvantaged households, as well as another reduction in fuel VAT, could be announced.
The help, which will be revealed tomorrow by Chancellor Rishi Sunak, is expected to be paid in significant part 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 struggling with the rising cost of living.
Labour has advocated for a windfall tax on energy companies that have achieved record profits, owing in part to Russia’s invasion of Ukraine.
Until recently, however, the government has resisted requests to impose the one-time charge, saying that it would discourage energy companies from investing in the UK. The prime minister, though, is said to have now sided with Mr Sunak, who had pushed for the tax.
Proposals to tax profits from other electricity producers, such as certain older wind farms and nuclear power reactors that have experienced windfall gains, have been shelved. Companies that invest more in the UK may be eligible for a tax break.
The Treasury said the government acknowledged “that individuals are struggling with rising prices” and that Mr Sunak had made it “clear that our reaction 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 jump by £800 in October, increasing the annual price to £2,800. In April, average bills had already climbed by £700.
According to Ofgem, this may put 12 million people in fuel poverty. The majority of council tax band A-D residents in England have already received a £150 rebate on their bills.