On Friday 23rd September Chancellor Kwasi Kwarteng announced his Growth Plan, which will tackle energy costs to help reduce inflation, support businesses and help households. Here are the changes being made;
Energy
the government is expecting to spend around £60 billion over the next six months from October on this energy package.
Households
In the growth plan, it was announced that a significant package of support will be given to households and businesses across the UK to help reduce the pressure of rising energy prices.
The first part of the package is to provide immediate support for households with an Energy Price Guarantee (EPG) which will cap the unit price for electricity and gas. This cap will prevent the average household from paying no more than £2,500 per year for the next two years starting from October 2022. This is expected to help the average household save at least £1,000.
Another part of the package is the Energy Bill Support Scheme. This will provide all households £400 of support this coming winter.
Both of the schemes are helping the average household save £1,400 this coming year.
Some households in the UK will be provided with an additional £100 for alternative heating fuels, as they will not receive support through the Energy Price Guarantee. An example of this is if a household is living in an area that is not served by the gas grid.
This will be in addition to the Energy Bills Support Scheme that will provide £400 support to all households this winter.
Businesses
To help businesses, the Energy Bills Support Scheme will be providing six-month support to help with rising energy prices, by providing discounts on wholesale gas and electricity prices. Three months from now, the government will review the scheme to see if further support needs to be provided after March 2023.
Overall, these are temporary measures to help support households and businesses with the cost of rising energy bills. To help households and businesses long term the government is looking at making interventions within the energy market.
Contains public sector information licensed under the Open Government Licence v3.0.