I know that rising costs of living, particularly for energy, are a real concern for many in Fylde. I want to assure you that the Government will continue to listen and to ensure that the policies in place do help those who need it most. I have made my ministerial colleagues aware of the concerns held by Fylde residents and I strongly welcome the range of measures put in place, including the new three-part plan to help households with their energy bills during this challenging period.
Several external factors have driven inflationary pressures. In particular, shortages created by the reanimation of the global economy and global energy price spikes brought on by the inability of supply to keep up with demand. This has been particularly acute when it comes to the price of wholesale gas.
Global gas prices are high due to various factors, including an increase in demand following the end of lockdowns in various countries and in return economies reopening, a cold winter in the UK, high demand in Asia for liquified natural gas (LNG) transported globally by freight which has meant that far less LNG has reached Europe, and weather events in the US limiting supply to Europe. With reduced variety of supply globally and much higher than anticipated demand, high wholesale gas prices have subsequently driven an increase in wholesale power prices, with a number of short-term markets trading at, or near, record levels.
I am pleased that the Government is clear that protecting consumers, particularly vulnerable consumers or those on low incomes, is its main priority. As such, the Government has reassured consumers that it is committed to the energy price cap and it will remain in place, protecting around 15 million customers up to £100 a year.
Beyond this, I welcome the three-part plan announced by the Chancellor to help households with energy bills.
The first part will see all households in England, Scotland and Wales with electricity meters will receive a £200 rebate on electricity costs from their supplier in October 2022. This will be clearly identifiable as a line on electricity bills and repaid over five years at a flat rate of £40 per year, with no interest, starting in April 2023. Ofgem will increase the price cap to reflect the additional cost to be recovered from consumers in future years, and energy companies will reimburse the government.
Second, there will be a non-repayable £150 cash rebate for homes in Council Tax bands A-D The government will fund local authorities to give all households in England in Council Tax bands A-D a one-off council tax rebate of £150 in 2022-23. It is expected that the vast majority of people who pay by Direct Debit to receive the money in April. For people who do not pay by Direct Debit, their councils will be ready to process their claims in April. 80 per cent of all households in England will benefit from the rebate and discretionary funding.
Third, £144 million of discretionary funding is being made available for local authorities to support households not eligible for the council tax rebate. The Government is also providing £144 million of discretionary funding for local authorities to support households not eligible – including properties in bands A-D that are exempt from council tax, and households on lower incomes in higher bands.
A rise in the National Living Wage will mean an extra £1,000 in the pockets of millions of people. The Government has also cut the Universal Credit taper rate and increased work allowances - which represent an effective tax cut for low income working households in receipt of UC worth £2.2 billion in 2022-23.
Furthermore, broad changes to the tax system are benefitting 31 million workers and mean that the first £12,500 a person earns will be completely tax-free and money has been made available to councils to distribute as hardship funds..
I will be working with my Parliamentary colleagues to ensure the Government continues to help ordinary households up and down the country as our economy continues to recover from the shock of Coronavirus.