A £10 billion package is set to be announced by the United Kingdom’s government in hopes that it will ease the increasing energy prices.
The funds are thought to be gathered partly by a windfall tax on energy product firms. This package had been in the works for a while but because some members of the cabinet have been strongly opposing taxing energy companies due to fears that they would stop investing in UK projects, this response is now being released.
This support will not only provide a large number of funds but may also help further expand supports already in place. The Warm Homes Discount, one-time payments to those vulnerable, and an additional cut in council tax are some of the possibilities.
Currently, the Warm Home Discount provides low-income families an annual discount of £150 on their electricity bill between the months of October and March. With the new additions, the plan is extended until March 2026 and includes a new three million people.
The average household energy bill rose to £700 in April and is expected to continue to increase by the UK’s energy regulator. Because of so much volatility in gas prices, the energy prices cap is also expected to increase. If that happens providers will be able to raise prices for energy and energy bills that were originally up to £800 could rise to £2,800, placing many homes in fuel poverty.
If Russia decides to disrupt the exportation of natural gas supplies then the price cap could increase even more. Prices would rise on a global scale and have worsened after Russia began its invasion of Ukraine. It is not only energy prices that have been heightened due to the War but fuel and food costs are also changing and harming households throughout Europe and in the UK.
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