Energy bill rebates aim to ease cost of living
Households are expected to see a rebate on their energy bills under plans to be unveiled by Boris Johnson and Rishi Sunak.
The Prime Minister and Chancellor will offer energy companies billions of pounds in state-backed loans in order to cut the price of energy to customers.
Under the “rebate and clawback” scheme companies will pass the money on to every household in Britain in the form of a rebate on energy bills.
Government sources told The Times the plans had been approved by ministers and could amount to £6 billion in loans, equivalent to a rebate of £200 for every household.
The move comes ahead of a 50% hike in the energy price cap in April to £2,000 a year, due to be approved by the regulator Ofgem in the coming days.
Ministers are also expected to unveil other targeted measures for poorer households, including an extension of the warm homes discount, council tax rebates and increased benefits.
The package of support will help head off a Tory rebellion over the rising cost of living and may go some way to placate concern over the decision to go ahead with a 1.25 percentage points rise in national insurance for employers and employees in April to clear NHS backlogs and overhaul social care.
Shop prices rise
Shop Price annual inflation accelerated to 1.5% in January, up from 0.8% in December – the highest rate of inflation since December 2012.
Helen Dickinson, chief executive of the British Retail Consortium, said: “The rise in shop prices is playing into wider UK inflation, which is pushing cost of living to the forefront of the political agenda.
“Many households will find it difficult to absorb the additional costs, as well as others on the horizon. Retailers are working hard to cut costs, but it would be impossible to protect consumers from any future rises. As commodity prices, energy prices and transportation costs continue to rise, it is inevitable that retail prices will continue to follow in the future.”
Mike Watkins, head of retailer and business insight, NielsenIQ, said: “The surge in energy and travel costs is now impacting disposable incomes and is likely to dent consumer’s willingness to spend. NielsenIQ research this month shows nearly a half of all households are saying that their most important concern at the moment is the rising cost of living.
“This will mean stores will need to encourage cash-strapped customers to keep shopping and despite the increase in shop prices, retailers are responding by keeping price increases as low possible for as long as possible.”