I understand anxiety over rising prices and inflation. I want to assure you that the Government will continue to listen and to ensure that the policies in place do help those who need it most.
The Prime Minister, the Chancellor of the Exchequer and the Business Secretary have met industry leaders from the electricity sector to discuss what more they can do to help people with rising energy prices. Through its Cost of Living Tsar, the Government has also set out Help for Households including a new system to cut broadband bills for millions of low-income households, alongside discounts on groceries, school uniforms and utilities.
In addition to this, the Government is working on a package of support that the next Prime Minister can consider when they take office.
Several external factors have driven inflationary pressures: shortages created by the reanimation of the global economy; global energy price spikes brought on by the inability of supply to keep up with demand; and the Russian invasion of Ukraine. This has been particularly acute when it comes to the price of wholesale gas.
Since Ofgem’s price cap rise, the Government has put forward a three-part package to help both lower- and middle-income earners with the immediate adjustment. This includes the £400 Energy Bill Support scheme payment, a non-repayable cash grant which will be delivered by energy companies in six payments from October. Further, a non-repayable £150 cash rebate is being provided for homes in Council Tax bands A-D, equivalent to 80 per cent of all households, and £144 million of discretionary funding has been made available for local authorities to support those ineligible for the council tax rebate. This will mean that hard-working families will receive £550, with lower-income families receiving even more help.
A rise in the National Living Wage will mean an extra £1,000 in the pockets of millions of people. The Government has also cut the Universal Credit (UC) taper rate and increased work allowances, an effective tax cut for low-income working households in receipt of UC worth £2.2 billion in 2022-23.
Furthermore, I welcome that the National Insurance personal threshold rose from £9,500 to £12,570 in July 2022. This has brought it in line with the equivalent Income Tax personal allowance and represents the largest increase in a personal tax threshold in British history, equivalent to a £6 billion tax cut for nearly 30 million workers and worth over £330 a year starting in July, across the entire UK. This represents the largest single personal tax cut in a decade.
I and my colleagues will continue to ensure the Government helps ordinary households across the country as our economy recovers from the shock of coronavirus.