After weeks of silence, Rishi Sunak finally returned to the political centre stage to set out his plans for dealing with the cost of living crisis facing the country.
The Chancellor’s absence during Boris Johnson’s partygate travails have not gone unnoticed at Westminster, with many suspecting that he was keeping his head down in anticipation of an imminent Tory leadership election.
But with millions of families about to be hit by soaring energy costs, higher council tax bills, rising inflation and a further hike in interest rates, Sunak could not stay hidden away in the Treasury forever.
And so he re-emerged this morning with a three-pronged £9bn support package which, he said, will help 28 million households make ends meet by cutting their council tax and energy bill.
Here is what each part of the plan looks like.
Lower energy bills
Every household in England, Scotland and Wales is set to benefit from a £200 cut in their energy bills from October, the Chancellor announced, just minutes after Ofgem revealed that the energy price cap is rising by £693 to £1,971. But there’s a catch. The discount will be funded by the government, but will then be clawed back by energy suppliers adding £40 to customers’ bills every year for five years, starting in 2023. Ministers say wholesale gas prices - and therefore overall bills - will be lower by then. But that is by no means guaranteed.
Council tax rebate
English households in council tax bands A-D will receive a £150 rebate on their bills from April. The one-off, government-funded discount is expected to benefit around 80 per cent of all homes in England.
Targeted help for the poor
Local authorities are to receive discretionary funding of £144 million to provide support for vulnerable people and those on low incomes who either do not pay council tax, or who live in properties in council tax bands E-H.
Sunak said: “Right now, I know the number one issue on people’s minds is the rising cost of living.
“That’s why the Government is stepping in with direct support that will help around 28 million households with their rising energy costs over the next year.
“We stood behind British people and businesses throughout the pandemic and it’s right we continue to do that as our economy recovers in the months ahead.”
But Shadow Chancellor Rachel Reeves said: “The Chancellor wants to load costs on taxpayers with a buy now, pay later scheme – while Labour will keep bills low with a windfall tax on North Sea oil and gas producers with booming profits.
“In the midst of a cost of living crisis, the Government’s proposals will leave families in Britain paying hundreds of pounds more as a result of the breathtaking rise in energy prices. It will be of little comfort to many.”