Energy bills: Rishi Sunak gives one-off £200 discount to households

A one-off £200 discount and a rebate on council tax bills have been announced by Rishi Sunak in a £9bn package designed to “take the sting” out of a £700-a-year rise in the average household’s energy bills in April.

The chancellor said 80% of households would receive £350 in support this year in response to the decision by the energy regulator Ofgem to raise its price cap to just under £2,000.

In an attempt to mitigate Britain’s cost of living crisis, Sunak said all households would receive £200 off their energy bills in October – but then pay the discount back by £40 a year for the subsequent five years.

The chancellor said council taxpayers in England in bands A to D would receive a rebate of £150 from their bills in April, which will not have to be paid back.

In a third part of the package, Sunak said local authorities would receive £150m to make discretionary payments to the neediest and the number of poorer households eligible for the warm homes discount would be increased by one-third.

“Without government intervention the increase in the price cap would leave the average household having to find an extra £693. The actions I’m announcing today will provide to the vast majority of households just over half of that amount, £350,”Sunak told MPs.

“In total the government is going to help around 28 million households this year. Taken together this is a plan to help with the cost of living worth around £9bn.

The Treasury will make money available to devolved administrations in Scotland, Wales and Northern Ireland so that they can offset the spiralling energy costs of poorer households.

Sunak said the fourfold increase in the global wholesale price of gas meant the energy price cap had to rise, but added: “We can take the sting out of this significant price rise for millions of families.”

The chancellor said a council tax rebate was more generous and better targeted at less well-off households than the cut in VAT on energy bills proposed by Labour.

Rachel Reeves, the shadow chancellor, said under Labour’s plan there would be £400 in targeted support for the poorest homes, as well as £200 in general support for most households. The poorest families would be largely protected from the increase in bills from April.

She said that meant the poorest families would be largely protected from the announced increase.

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