John Healey has unveiled a package of support for households being buffeted by “global economic storms”.
asserted
Healey → unveil → storms
“I’m setting a new course to get energy costs down in line with Europe,” the chancellor said in his maiden budget.
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chancellor → set → budget
In the long term, he hopes that changes in how Britain covers the cost of renewables and grid upgrades will “drive down all aspects of energy bills”.
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Britain → hop → bills
British households face some of the highest energy charges for three years, with the war in the Middle East driving up oil and gas prices.
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war → face → prices
Under the government’s price cap, average dual-fuel bills are £1,700 a year and could rise to more than £2,100 a year from January, according to industry forecasts .
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bills → rise → forecasts
So what has the chancellor offered hard-pressed households to help them through the coldest months of the year?
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chancellor → offer → year
And will it be enough to lower gas and electricity bills?
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it → lower → bills
The government’s biggest bet on offering “breathing space” to struggling households this winter is a one-off payment of £100 in January for 20m households in council tax bands A to D.
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bet → offer → D.
It is also the measure most likely to deliver real benefit for those in need.
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It → deliver → need
The £2.6bn “household energy payment” will go directly into bank accounts to “take the pressure off in the coldest months and see people through to the spring”, according to Healey.
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payment → go → Healey
Martin Lewis, the founder of MoneySavingExpert.com, said households could face a 25% cost increase from January and shouldn’t expect to feel better off than they do today.
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they → say → January
Officials are anxious to avoid handing public money to those who can get by without it but they lack household income data to target proposed support.
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they → avoid → support
Using council tax bands is “the least worst proxy”, Lewis said.
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Lewis → use → bands
The payment will be in addition to the Warm Home Discount, which offers about 6m means-tested households in England, Wales and Scotland £150 off winter fuel bills.
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which → offer → bills
A chart showing how poor households could miss out on the £100 energy payment An end to gas standing charges
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households → show → charges
This measure will offer a modest saving for most British households – but not all, and perhaps not until next winter.
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measure → offer → winter
Healey promised to end “unfair and outdated” standing charges on gas bills for 23m homes “in 2027 or as soon as possible after”.
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Healey → promise → 2027
This could help almost two-thirds of households to save an average of £45 a year.
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thirds → help → 45
A standing charge is a fixed daily fee paid through all household gas bills, regardless of how much is used.
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much → stand → bills
It means homes that severely ration their gas use – or use none at all – still shoulder the same cost as a high-income household.
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that → mean → household
The charge typically adds about £100 a year to bills and the change means these costs will soon be recovered through a higher unit price for gas.
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costs → add → gas
For those with below-average gas use, bills should fall.
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bills → fall → use
Jonny Marshall, an economist at the Resolution Foundation, said households with high gas use might have higher bills when the unit rate increases.
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rate → say → bills
These could include low-income households who have bigger families or poorly insulated homes.
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who → include → families
A home using 7,000 kilowatt hours of gas a year would save about £40 under the change, but a household using 14,000 kWh of gas a year could be £25 worse off, according to Richard Neudegg, a director at Uswitch.com.
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household → use → Uswitch.com
A household using the typical 11,500 kWh shouldn’t see any change, he added.
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he → use → change
Removing standing charges from gas bills will help two-thirds of households save an average of £45 a year.
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thirds → remove → 45
The government has already begun taking aim at taxes and policy costs loaded on to electricity bills that could over time mean removing hundreds of pounds from bills.
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that → begin → bills
This month, it removed the 5% VAT levy on electricity bills for 29m households, effectively saving them about £45 a year.
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it → remove → 45
This was supposed to help households through the coldest months of the year, until March.
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This → suppose → March
But Healey has promised to keep VAT off bills until July, extending the annual savings to £50 a year, according to the Treasury.
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Healey → promise → Treasury
The move follows a string of cuts to electricity levies over the past year which have shaved about £150 a year off costs.
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which → follow → costs
“For many years, under Conservative governments, policy costs were simply loaded on to household bills through levies,” Healey said.
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Healey → load → levies
“Today, I am putting an end to that.
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I → put → that
We’ll introduce a new cost control framework to drive down all aspects of energy bills.”
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We → introduce → bills
Healey confirmed he would consider steps to remove standing charges on electricity too, which add about £200 a year to the average bill.
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which → confirm → bill
The savings from this measure remain unclear, depending on which costs would move into general taxation and which would be covered through the unit price for electricity.
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which → remain → electricity
Healey will continue to alter a subsidy scheme for the UK’s oldest renewable energy projects, around three-quarters of which has been removed from bills and covered by general taxation.
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quarters → continue → taxation
The research charity Nesta said this would lower electricity costs by £42 a year.
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this → say → 42
Healey has scrapped plans for a levy to support hydrogen projects that would otherwise have added £2.60 to £4.50 a year to the average dual-fuel bill.
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that → scrap → bill
…and 12 more, not listed.
The Aporia
