Budget: £100 winter energy payment for council tax bands A to D

Mixed · 2Chancellor John Healey announced in the Budget on 28 October that households in council tax bands A to D will get a £100 energy payment this winter, paid directly into their bank accounts. 1 2 Left · 1The scheme covers about 20 million households and costs £2.6 billion. Healey told the Commons it would "take the pressure off in the coldest months and see people though to the spring", and cited the conflict in the Middle East as a cause of rising energy bills. 1 Left · 1Healey said money would go to the devolved administrations, and called on them to "do the same and give people of all nations in the UK breathing space on their energy bills this winter". 1

Left · 1The Mirror says consumer champion Martin Lewis had pressed for such a move ahead of the Budget, and that a giveaway was widely expected given a forecast winter price surge. 3 Left · 1The Budget also extended the temporary scrapping of VAT on electricity bills from next March to July, which Healey said would save the average customer around £50 a year. 3 Left · 1Healey also said gas standing charges would be moved onto the unit rate, with Ofgem told to do this next year or as soon as possible after, and promised similar reform for electricity bills. The government says the average household would save £45 a year, with low gas users gaining most. The Mirror says standing charges account for about £108 a year on the average gas bill. 3

Mixed · 2The reforms will not lower bills this winter. Ofgem's price cap rose 3.6% to £1,723 for a typical household on 1 October, and a further rise is forecast for January: around 22% according to the Standard, 27% (almost £470 a year, to almost £2,100) according to the Mirror. 2 3 Left · 1Shortly after the announcement the government's council tax band checker website failed, showing the message "Sorry, there is a problem with the service. Try again later." The Mirror attributes this to people checking their band to see whether they qualify. 1 3 Centre · 1Simon Francis of the End Fuel Poverty Coalition said the payment would "barely dent" the January rise and that the Chancellor "talked the talk" but "failed to walk the walk". He added that because the money is paid into household accounts it may not be spent on keeping warm. 2

Centre · 1Citizens Advice chief executive Dame Clare Moriarty welcomed the extra support but said significant gaps remain and that support must be targeted at those with the greatest energy needs. 2 Centre · 1On standing charges, Cornwall Insight, Energy UK and Uswitch called the shift broadly sensible or progressive, but warned that the costs must be recovered elsewhere. Households with high gas use, poor insulation or health-related heating needs could pay more. Uswitch estimated that a household using 7,000 kWh a year would be about £40 better off and one using 14,000 kWh about £25 worse off, with no change at the typical 11,500 kWh. 2 Left · 1Labour donor Dale Vince, founder of Ecotricity, urged the government to "go the whole hog" and remove standing charges and VAT from both gas and electricity. 3