In response, chancellor Rishi Sunak set out a number of measures in an effort to manage the impact this will have on consumers. This includes a £9.1 billion one-off repayable discount, a council tax rebate and a discretionary fund.
“Today we recognise the real and growing concerns people have about the cost of living – and once again we are taking action,” said Prime minister Boris Johnson.
“We are delivering a new package of targeted support to help with the financial pressures felt by families right across the country, with additional help for those most in need.”
While acting to manage the increase to bills has been welcomed, the steps have been criticised by a number of groups. One of the key critiques is that the £200 discount 28 million homes are set to receive on their energy bills will not come into effect till October, when the next price period begins.
“We very much welcome the support for customers announced by the Chancellor today, but with no sign of wholesale prices falling and bills likely to remain high through the autumn, our concern for millions of customers, as well as the stability of the retail sector, remains,” said Energy UK’s chief executive, Emma Pinchbeck.
According to predictions for Cornwall Insight, the next price cap period will see a further increase to more than £2,300 per year. So while the loan may help customers manage that, it will not relieve the strain of the summer price period, which comes into effect in April.
Additionally, both the Labour Party and the Green Party have criticised that the discount, dubbed by the government as the ‘Energy Bills Rebate’, will need to be repaid, taken in £40 instalments from 2023.