RISHI Sunak has today laid out his £9billion plan to shield millions of squeezed Brits from a cost of living catastrophe.
The Chancellor is giving struggling households £350 to help offset today’s crippling hikes in energy bills and interest rates – dubbed Black Thursday.
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But the catch is £200 of this will have to be paid back, leaving critics slamming the package as a mere sticking plaster barely covering spiralling household costs.
Taxes and energy bills are are both rising in April to add to existing pressures of soaring inflation and mortgage repayments.
The Chancellor told MPs: “Right now, I know the number one issue on people’s minds is the rising cost of living.
“And just as the government stood behind the British people through the pandemic so we will help people deal with one of the biggest costs they now face – energy.”
In the Commons this morning the Chancellor revealed:
1) COUNCIL TAX CUTS
Mr Sunak announced a £150 cut to council tax payments to help ease the pinch on millions of families this spring.
The Treasury will bung £3.6 million to town halls who will in turn dish out the rebate to households in April.
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The 28 million homes in council tax bands A-D will be eligible for the reprieve, covering four in five families.
Mr Sunak said: “This means around 80 per cent of all homes in England will benefit.”
Devolved powers in Scotland, Wales and Northern Ireland will also he given cash to replicate the discount in their nations.
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2) ENERGY BILL REBATE
Mr Sunak will also give every household a £200 refund on energy bills by underwriting £5.5billion of state-backed loans from October.
Suppliers will hand the money to customers, who will gradually pay back the cash in £40 instalments from 2023 over the next five years.
Ofgem today raised the energy price cap by £693 to £1,971 to stop more providers going bust – sending bills for hard-up families rocketing.
The “rebate and clawback” scheme will ease the pressure on bill-payers in the short term – but customers will have to pay back the cash eventually.
3) ONE-OFF PAYMENTS
Mr Sunak also earmarked £144 million for households ineligible for the council tax cut.
Pensioners and students do not pay council tax, but will still be whacked with bill rises.
Many who live in homes in council tax bands E-H are also not necessarily mega-wealthy – many own properties that have simply soared in value.
Mr Sunak said these people will benefit from the £144million pot to be paid directly to local authorities.
4) NO VAT CUT
Despite enormous pressure from senior Tories and Labour, Mr Sunak did not bow to pressure to shave VAT on energy bills.
The 5 per cent levy is staying after Boris Johnson branded it a “blunt instrument” and said he preferred more targeted measures.
Mr Sunak agreed: “That policy would disproportionately benefit wealthier households.
“There would also be no guarantee that suppliers would pass on the discounts to all customers.”
During the Brexit referendum Mr Johnson said one of the benefits of Leaving would be the ability to slash VAT on heating costs.
