Skip to content
Search
AI Powered
Latest Stories

Sunak sets out financial support for domestic electricity customers; rules out VAT cut

Sunak sets out financial support for domestic electricity customers; rules out VAT cut
Photo: iStock

The government will step in to take the sting out of rising energy prices, Chancellor Rishi Sunak said on Thursday, setting out a series of financial support schemes. However, he rejected a demand, made by businesses, among others, for a cut in VAT.

Energy prices for millions of households are set to soar from April after the energy regulator said it would increase its price cap by 54 per cent. Sunak said the government's help would provide the majority of households with £350, just over half that rise.


"For me to stand here and pretend we don't have to adjust to paying higher prices would be wrong and dishonest. But what we can do is take the sting out of a significant price shock for millions of families by making sure the increase in prices is smaller initially and spread over a longer period," Sunak told parliament.

"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 £9 billion."

The measures include a £200 discount on electricity bills for all domestic electricity customers from October, to be repaid over five years, and a £150 rebate on council tax bills for around 80 per cent of households in England from April which would not need to be repaid, he said.

Sunak said the government would also provide discretionary funding of £144 million to help people on low incomes who either do not pay council tax or are in properties that will not receive the rebate.

Chancellor was silent on non-domestic consumers though small businesses have been demanding government protection from spiralling energy costs.

As per the Federation of Small Businesses’ (FSB) latest quarterly survey, 45 per cent of the nearly 1,300 firms that participated said their costs had increased in the past three months because of rising utility bills, driven by the price of energy.

The FSB has demanded a cut in the 5 per cent rate of value added tax (VAT) on energy bills and proposed measures such as a portion of a 'redress fund' overseen by Ofgem to be made available for microbusinesses in trouble and an energy price cap for the very smallest firms.

Responding to the demand for a VAT cut, Sunak said that would “disproportionately benefit” wealthier households and become a permanent government subsidy worth £2.5 billion every year on everyone’s bills when the government is trying to rebuild the public finances.

“There would also be no guarantee that suppliers would pass on the discounts to all customers,” he added. “Instead, 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.”

More for you

Post Office cash deposits and withdrawals
Post Office, DPD partners to rollout ‘Click and Collect’ services
Post Office, DPD partners to rollout ‘Click and Collect’ services

Parliament to launch inquiry into Post Office Horizon scandal compensation delays

Parliament is to launch an inquiry into delays in compensation settlements for sub postmasters affected by the Horizon scandal.

The newly-formed Business and Trade Select Committee will call ministers, subpostmasters and their lawyers to give evidence next week with a second session to follow in mid-November. The Committee’s chair, Liam Byrne MP told ITV News that there was “definitely a delay” in people coming forward for payment.

Keep ReadingShow less
Bacup Wine and Convenience shop, 34 Burnley Road, Bacup.

Bacup Wine and Convenience shop, 34 Burnley Road, Bacup.

Robbie MacDonald via LDRS

Shop’s licence bid rejected over illegal vapes and ‘no regard’ for children’s safety

A Rossendale shop has had a licence bid rejected after repeatedly selling vapes to children and having illegal products on its premises.

Management at the Ibra Superstore at 34 Burnley Road, Bacup, have shown ‘no regard’ for children’s protection and safety, and have insufficient controls for licensing, Rossendale councillors have ruled.

Keep ReadingShow less
SPAR retailer hits target to secure £100,000 free stock from James Hall

SPAR retailer hits target to secure £100,000 free stock from James Hall

SPAR North of England retailer Dara Singh Randhawa’s family store has been awarded £100,000 of free stock after hitting all his targets since moving to the symbol.

Dara and his family, who have their SPAR store in Patrington in the East Riding of Yorkshire, joined SPAR through its association with James Hall & Co. Ltd in August 2023 having taken the decision to maximise the store’s potential.

Keep ReadingShow less
Pound Sterling bank notes
iStock

National Living Wage to increase to £12.21 in April 2025

The government has on Wednesday announced its acceptance of the Low Pay Commission’s (LPC) recommendations on the rates of the National Minimum Wage (NMW), including the National Living Wage (NLW).

The rates which will apply from 1 April 2025 are as follows:

Keep ReadingShow less
Michael Fletcher

Michael Fletcher

Former Nisa chief Michael Fletcher appointed SPAR UK managing director

SPAR UK has announced the appointment of Michael Fletcher as its new managing director.

Fletcher spent 22 years at Tesco plc, where he held numerous senior commercial roles in the UK, Ireland and Asia. He joined Co-op Retail in 2013 where he held the position of chief commercial officer before moving on to become CEO of Nisa Wholesale, a role he held until 2022.

Keep ReadingShow less