Every household in the UK will receive a £400 discount on their energy bills as prices increase by more than £800 this autumn. Addressing the House of Commons today, Chancellor Rishi Sunak acknowledged the situation has worsened since he announced the energy bills discount earlier this year, which was effectively a £200 loan to be repaid over the course of five years.
He said that the loan had been scrapped and instead replaced by a grant, which means people won't have to pay the money back. It has now also been doubled from £200 to £400. Describing previous government plans to provide all households with £200, Mr Sunak said: “Since then the outlook for energy prices has changed, I’ve heard people’s concerns over the impact of these repayments on future bills, so I’ve decided that those repayments will be cancelled.”
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“This support is now unambiguously a grant,” he said, adding “the £200 of support for household energy bills will be doubled to £400 for everyone”. On Wednesday (25 May) regulator Ofgem announced that the energy price cap would be rising to £2800, increasing by another £800.
In April, the cap rocketed to 52% meaning the average household would be forking out almost £700 extra a year on their bills, totalling just under £2,000. The grant was just one of three key measures the Chancellor unveiled on Thursday (26 May) as part of a £15 billion package to tackle the impact of soaring inflation.
He also announced a levy on energy profits, meaning oil and gas companies will be temporarily taxed 25% on their gains. It was a move both Labour and the Lib Dems had been calling on for some time. In May, Shell revealed record first-quarter profits thanks to soaring oil and gas prices, just days after bumper earnings from rival BP.
The oil giant posted better-than-expected underlying earnings for the first three months of 2022, at 9.1bn US dollars (£7.2bn) – nearly three times the 3.2bn dollars (£2.5bn) reported a year earlier. While fellow FTSE 100 firm BP unveiled its highest quarterly underlying profits for more than a decade, at 6.2bn US dollars (£5bn).
