Saying that the Government “will not sit idly by” while there is a risk that some families could be hit so hard by the crisis that “they might never recover”, The Chancellor Rishi Sunak has announced new £15 billion package of targeted government support to help with the rising cost of living.
Almost all of the eight million most vulnerable households across the UK will receive support of at least £1,200 this year, including a new one-off £650 cost of living payment while Universal support increases to £400, as the October discount on energy bills is doubled and the requirement to repay it over five years is scrapped
Benefit claimants will get £650 straight to their bank accounts to help ease the pain of cost of living as Sunak unveil what he called £15billion of “timely, temporary and targeted” support to millions of families.
Pensioners who receive the Winter Fuel Payment will also get an extra £300 and 6 million disabled people will get a one off payment of £150.
And every UK household will receive a grant toward energy bills of £400 next year double the amount announced earlier this year
The costs will be partly funded by a 25 per cent windfall tax on energy producers who have said Sunak made “extraordinary profits” this year thanks to surging global wholesale costs.
The tax he said will raise an extra £5 billion in tax revenue.
Zoë Billingham, director of IPPR North said:
“The announcement from the Chancellor today was needlessly delayed, causing hardship and anxiety for millions. Although well overdue, it’s right that he’s listened to our calls to return to Parliament and do more to support people with the soaring cost of living and has introduced targeted support through the benefits system supported by a windfall tax.
“The government’s flagship levelling up agenda is under grave pressure from our cost of living crisis. After years of centralised decision making, the resilience of regions like the North – a place with already some of the highest fuel poverty rates in the country – has been eroded. Today’s measures are helpful sticking plaster.
“Now that the sticking plaster is being administered, it’s time to act to tackle the root causes of the cost of living crisis and financial precarity of so many. We need a longer-term commitment to shore up the incomes of our lowest earners and further measures to reduce living costs, including by retrofitting homes to help build resilience now and for the future. The government can no longer afford to do economic policy by crisis and instead needs to build resilience back into our economy.”
Paul Kissack, Chief Executive of the Joseph Rowntree Foundation, said:
“For people living with worry and fear through this cost of living crisis, and especially for those going without essentials, today’s statement will offer very welcome relief. It is right to target help at those on low incomes, who are least able to bear the shock of soaring energy bills.
“We are pleased by the commitment to uprate benefits in line with inflation as usual, though it is still crucial that the government invests on an ongoing basis in ensuring that everyone can get through difficult times and afford the essentials.
“The measures announced today suggest that the Chancellor has recognised and taken action on an immediate need, and we hope to work with him to strengthen the social security system in the long term so that fewer people approach the brink when times are hard”.
Director of the Work Foundation at Lancaster University, a leading think tank for improving work in the UK:
“It’s welcome that the Chancellor has finally introduced new measures to help people through the cost of living crisis. The one-off payment of £650 to low income households is significant, and as it will be made via the benefits system it will land direct in the bank accounts of those who need it most.
“But the wait to provide this support has already caused significant damage, and delaying part of this payment to the Autumn risks compounding this. The UK Insecure Work Index shows that one in five (6.2 million) workers in the UK live in severe insecurity, unsure of how many hours they can work or much money they will earn. Making piecemeal announcements every few months only adds to the anxiety and uncertainty they face.”