Will the government support Brits struggling with rocketing energy bills?

With the energy price cap set to rise this spring, will the government support vulnerable households with their bills? Here’s what you need to know.

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You’ve probably already heard that the energy price cap will rise in April 2022, following the energy crisis. This will definitely put a strain on the finances of vulnerable households. Will the government offer support to Brits struggling with rocketing energy bills? Here’s what you need to know.

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The government acknowledges there’s a problem

According to Sky News, the prime minister will take part in meetings in the coming weeks to determine how the government can support families likely to be crippled by the energy price cap rise.

In fact, it has been reported that there’s a high chance Johnson will announce new measures on or before 7 February 2022. The treasury has also acknowledged that additional funds will be needed to support vulnerable families.

As much as the government is willing to help, it has some concerns:

  • The government fears that a one-off payment to struggling families might not be sufficient. In fact, it’s almost certain that there will be demand for more help until energy pieces fall, which might not happen rapidly.
  • The treasury has already pledged billions of pounds of support due to the impact of the Covid-19 pandemic. It seems it is reluctant to expend further large payments in the near future.

What the government might do to help

There are three possible ways that the government might support vulnerable households, but nothing is guaranteed.

1. Cut VAT on domestic energy use from 5% to 0%

This would offer support to those in need, but it would also offer cheaper bills to households already in a strong position to pay. The prime minister has already highlighted that he is not in favour of financial assistance for those who are well-off and can afford the energy price cap rise. Therefore, it’s unlikely that a VAT cut on energy will happen.

2. Extend, expand or reform the warm home discount scheme 

The Department for Business, Energy & Industrial Strategy ran a consultation in the summer, seeking views on proposals to extend, expand or reform the Warm Home Discount scheme to 2026. The outcome of the consultation has not yet been made public. But there might be reforms to support vulnerable households struggling with rocketing energy bills.

3. Reduce or scrap green levies on energy bills

According to the BBC, two energy firms are proposing that green levies on bills be scrapped in an effort to support Brits facing higher prices. As the founder of Ecotricity explains, “The levies on energy bills are a ‘stealth tax’ of hundreds of pounds a year.”

Sharing a similar goal, Centrica’s boss proposes that the government funds green programmes through general taxation instead.

You don’t have to wait for the government’s help

It’s wise to prepare for the worst on an individual level as you wait to discover whether the government will put support measures in place. Things you can do before the energy price cap is raised include:

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