Pressure points

This briefing note looks at the options the Government has to support households facing surging energy bills this winter. With low-income households already living with inflation of more than 10 per cent, a rise in the energy price cap to £2,800 will push almost 2 million households into severe fuel stress – whereby they spend more than a fifth of household budgets on energy bills – this winter. The Chancellor should provide support that is targeted to low-income households through the benefit system, as these families are unlikely to be able to rely on the coping strategies available to higher-income households. Given the £15 billion fall in benefit spending because of higher inflation, and existing support through the Council Tax rebate, the Government should be aiming for a package of support of at least £10 to £15 billion to cover bills this winter. There are a number of options available to achieve this, but one-off payments (delivered through existing mechanisms such as the Winter Fuel Payment or Christmas Bonus systems) to all households on benefits (including all pensioners) are now preferable and probably easier to deliver than alternatives.