The Covid Pandemic and Putin’s invasion of Ukraine have created immense challenges for the global economy with energy prices rising and families facing significant cost of living pressures. I therefore welcome the Government’s decisive action on energy bills and the determination to drive growth in the economy. It is economic growth that ultimately enhances standards of living and provides the growing tax revenues that support expanding public services.
The Energy Price Guarantee (EPG) will ensure that the typical household pays no more than £2,500 per year for their energy bills for the next two years. Energy suppliers will automatically apply the reduction to users’ energy bills from 1st October. Similarly EPG is set to save the average household at least £1,000 per year compared to what they would otherwise have been paying.
The Government has also announced details of the Energy Bill Relief Scheme which will support businesses, the voluntary sector and public sector organisations facing increased energy bills. A Supported Wholesale Price is expected to be less than half the wholesale prices of electricity and gas anticipated this winter. Suppliers will pass this discount on to their customers from 1st October. The Scheme will initially run for six months, with a review published after three months. The Government is also setting up a discretionary fund to assist many who would not otherwise benefit from these support packages.
This support comes on top of the £400 Energy Bill Support Scheme and the £1,200 of support for the most vulnerable households announced earlier this year.
As this Government proved through Covid there are moments when we must borrow as a nation to support the country through difficult times.
This Growth Plan is however determined to go further: the Basic Rate of income tax will be cut to 19% next year; the the top rate of income tax will be reduced to 40%. Additionally, the reversal of the National Insurance rise will mean 28m keeping an extra £330 per year, while Corporation Tax will be held at 19%. This is a comprehensive package of measures designed to support incomes, boost the economy and support investment and employment.