When is the energy announcement? What we know about the new cost of living support Liz Truss could announce

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Liz Truss has formally change into the new Prime Minister, changing Boris Johnson in No 10.

The former overseas secretary defeated Rishi Sunak in the Tory management contest, earlier than assembly the Queen at Balmoral on Tuesday.

She will shortly get to work assembling her Cabinet, and should then flip her consideration to the cost of living disaster, which will probably be her first main problem in the high job.

Soaring inflation and energy prices have hit households arduous and compelled hundreds of thousands right into a alternative between heating and consuming this winter, whereas businesses like pubs and eating places are in danger as a consequence of unaffordable payments.

Here’s what the new Prime Minister has stated about plans to deal with the disaster.

When will Liz Truss make an announcement on energy payments?

Ms Truss has dedicated to asserting a complete plan to deal with the cost of living disaster inside a month of coming into No 10, and is anticipated to make an preliminary announcement earlier than the finish of the week.

“I’ll act if I’m elected as prime minister. I’ll act instantly on payments and on energy provide as a result of I believe these two issues go hand in hand,” she stated in a latest interview.

“We have to cope with the instant drawback, we want to assist folks. We want to assist businesses. But we additionally have to kind out the provide points.”

What support will she announce?

The Government has thus far been making an attempt to deal with the cost of living disaster with handouts, reminiscent of the £400 energy grant and £650 cost of living support fee.

However, Ms Truss has beforehand been immune to this technique. She instructed the Financial Times in August: “Of course I’ll take a look at what extra will be executed. But the method I’d do issues is in a Conservative method of reducing the tax burden, not giving out handouts.”

Sarah Coles, senior private finance analyst at Hargreaves Lansdown, stated: “Ms Truss has confirmed that helicopter funds [cash handouts] don’t match along with her ideology, and he or she desires to ease the cost of living with tax cuts.”

The new PM has already dedicated to scrapping the 1.25 share level nationwide insurance coverage hike introduced in underneath Mr Johnson. She has additionally been contemplating slicing VAT from 20 per cent to fifteen per cent.

Ms Truss’s readiness to chop taxes was a big differentiator between herself and Rishi Sunak in the management marketing campaign.

“Truss is placing an terrible lot of religion in tax cuts to ease the ache of rising prices after which kick-start financial development,” Ms Coles stated.

“Of course, we’ll need to see whether or not all that sticks when the rubber hits the street. But with value rises of this scale hitting throughout the board, and propelling us into the largest two-year drop in actual incomes in a century, the Government can’t afford to fall quick when contemplating attainable options.”

The new Prime Minister has additionally refused to rule out an energy invoice freeze.

How would an energy invoice freeze work?

Last month, energy regulator Ofgem introduced that the energy value cap will improve from £1,971 to £3,549 in October – up 80 per cent.

The bleakest energy forecast to this point predicted common annual energy payments could high £7,000 from April 2023.

Labour, the Liberal Democrats and the SNP have already referred to as for a value cap freeze.

Under Labour’s plan, at a cost of round £30bn, the Government would assure loans to energy firms for six months, permitting them to maintain payments frozen at slightly below £2,000.

The scheme can be partly funded by a stringent windfall tax on energy giants, which might be backdated to January, excluding present tax breaks.

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The Times stories Ms Truss’s package deal could be on the scale of the furlough scheme launched by former chancellor Mr Sunak when the Covid-19 pandemic struck, whereas The Telegraph suggests the specifics of such a coverage are nonetheless being debated.

She is prone to be eager to keep away from any package deal resembling Labour’s too intently, to keep away from going through criticism that she has merely stolen the Opposition’s coverage.

A senior Government supply instructed The Times the package deal could cost “at the least” £69bn, whereas Ms Truss herself didn’t deny on Sunday that the value of reminiscent of scheme could attain £100bn.

“Before you’ve got been elected as prime minister, you don’t have all the wherewithal to get the issues executed,” Ms Truss instructed the BBC’s Sunday with Laura Kuenssberg programme.

“This is why it’s going to take per week to kind out the exact plans and make certain we are capable of announce them. That is why I can not go into particulars at this stage. It can be flawed.”

Luke Murphy, affiliate director for local weather and energy at the Institute for Public Policy Research, stated: “These proposals would forestall hovering energy payments from pushing hundreds of thousands into debt and destitution, and maintain down ever-rising inflation which is a threat to the UK’s financial stability.

“This is the scale of intervention we have to see from the Government, in addition to stronger support for lowest revenue households.”

Freezing the cap at its present stage would forestall an estimated 4.4 million folks being plunged into gas poverty subsequent month, in accordance with gas poverty charity National Energy Action.

What support is already obtainable?

£650 cost of living fee

The £650 cost of living grant is being paid in two instalments to all households on means-tested advantages, together with these receiving the following:

  • Universal credit score
  • Income-based jobseeker’s allowance
  • Income-related employment and support allowance
  • Income support
  • Working tax credit score
  • Child tax credit score
  • Pension credit score

The first instalment of £326 appeared in folks’s financial institution accounts in the second half of July, with the second to reach in the autumn – date but to be confirmed.

The exception is people who find themselves eligible solely by means of receiving youngster tax credit score and dealing tax credit score – who ought to obtain the first fee between Friday 2 and Wednesday 7 September. They will then obtain the second fee in the winter.

The Department for Work and Pensions (DWP) stated the delay was to keep away from folks on tax credit being paid twice.

The second fee will probably be of £324. The purpose for the two funds being barely unequal is “to minimise fraud dangers from those that might search to take advantage of this technique”, the Government stated.

The grant is tax-free for all eligible teams, won’t have an effect on the profit cap and/or have an effect on current profit awards.

There is no want to use for the grant. Eligible folks ought to have the funds seem of their financial institution accounts robotically, with the code “DWP C O L” or related.

£400 energy grant

The £400 energy fee is being made to each family in the nation, without means testing.

Originally, the plan was for households to obtain a £200 low cost on their energy payments in October, which might then be paid again over 5 years from 2023, with prospects paying a further £40 on their payments annually.

However, in late May – and after a lot criticism – then-chancellor Rishi Sunak introduced the low cost can be elevated to £400 and would now not need to be paid again.

The £400 low cost will begin in October and be paid out to shoppers in instalments over six months, with the grants administered by means of energy suppliers.

The low cost will break down into instalments of £66 in October and November, rising to £67 monthly from December till March 2023.

It will probably be offered on a month-to-month foundation, regardless of whether or not folks pay payments month-to-month or quarterly or have an related fee card.

Those with a home electrical energy meter level who make funds by means of fee playing cards, commonplace credit score, and direct debit will obtain an computerized deduction on payments.

People who use prepayment meters and high up their credit score earlier than utilizing energy will probably be supplied with low cost vouchers in the first week of every month.

These will probably be despatched by textual content message, electronic mail or post with the most recent contact particulars prospects have left with suppliers.

The low cost additionally applies to college students and different tenants renting properties with home electrical energy contracts from landlords the place mounted energy prices are included of their rental prices. In these circumstances, landlords who resell energy to their tenants ought to cross the discounted funds on appropriately, according to Ofgem guidelines to guard tenants.

In all circumstances, no family must be requested for financial institution particulars at any level. Ministers are urging shoppers to remain alert of potential scams and report these to the related authorities the place they’re suspected.

£300 winter gas fee

Most pensioners will already be accustomed to the winter gas fee, an annual tax-free lump sum issued by the Department for Work and Pensions.

This yr, the Government is including an additional £300 to spice up the support for greater than eight million pensioner households.

The winter gas fee will probably be made obtainable for households that embrace somebody born on or earlier than 25 September 1956.

You should additionally reside in the UK for at the least someday throughout the week of Monday 19 to Sunday 25 September 2022.

If you don’t reside in the UK throughout the qualifying week, you may nonetheless get the fee if each the following apply:

  • You reside in Switzerland or a European Economic Area (EEA) nation;
  • You have a real and ample link to the UK – this could embrace having lived or labored in the UK, and having household in the UK.

You can not get the fee in case you reside in Cyprus, France, Gibraltar, Greece, Malta, Portugal or Spain as a result of the common winter temperature is greater than the warmest area of the UK.

You don’t sometimes have to use for the winter gas fee if you’re eligible. You ought to obtain the money robotically.

However, in case you have not had the fee earlier than, you’ll need to say if any of the following apply:

  • You don’t get advantages or a state pension;
  • You solely get housing profit, council tax discount, youngster profit or common credit score;
  • You get advantages or a state pension however reside in Switzerland or an EEA nation.

Contact the winter fuel payment scheme online or by way of cellphone or post in case you want to enquire additional or make adjustments to your funds.

You can discover the claimant form on the DWP website here. Claims will probably be accepted till 31 March 2023.

The Government has stated the £300 fee must be with pensioners by autumn 2022. You will get a letter telling you the way a lot you’ll get, and an estimated fee date.

You must be paid by 13 January 2023 at the very latest.

£150 incapacity fee

People on incapacity advantages could also be eligible for a £150 cost of living fee in the event that they obtain any of the following:

  • Attendance allowance
  • Constant attendance allowance
  • Disability living allowance for adults
  • Disability living allowance for youngsters
  • Personal independence fee (PIP)
  • Adult incapacity fee (in Scotland)
  • Child incapacity fee (in Scotland)
  • Armed Forces independence fee
  • War pension mobility complement

You should have acquired a fee of one of these qualifying advantages for 25 May 2022.

If you get a qualifying incapacity profit from the Ministry of Defence (MoD) and a qualifying incapacity profit from the Department for Work and Pensions (DWP), you’ll solely obtain a fee from DWP.

Around six million individuals are eligible for the fee, the DWP has stated.

The grant will start being paid robotically from Tuesday 20 September. You don’t want to use.

DWP stated the overwhelming majority of these eligible are “anticipated to obtain their one-off fee inside a pair of weeks by the starting of October”.

Payments will probably be made to individuals who get a qualifying incapacity from DWP earlier than those that get it from the MoD.

The £150 incapacity fee is tax free, and received’t depend in direction of the advantages cap or have an effect on any current advantages you presently declare.

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