Sunak reveals £9b package to offset energy crunch

[LONDON] Chancellor Rishi Sunak announced a raft of measures as the UK government sought to get a grip on a burgeoning cost-of-living crisis, with millions of Britons facing record increases in their energy bills.

"The government is going to step in to directly help people manage those extra costs," Sunak said in the House of Commons on Thursday, saying his intervention was worth £9 billion (S$16.4 billion). "We can take the sting out of a significant price shock for millions of families." Sunak announced the package shortly after energy regulator Ofgem said it would raise a price cap on domestic gas and power bills by 54 per cent for 22 million customers.

The price cap rise would add £693 to energy bills - Sunak said the government action would offset the hike by £350.

Prime Minister Boris Johnson and Sunak have come under increasing pressure from the opposition and from within their own party to soften the blow to households caused by inflation at a three-decades high and a tax burden that's set to reach its highest since the 1950s.

The policies announced by Sunak include:

A £200 upfront discount on electricity applied from October, financed by the government and repaid in £40 instalments over the next five years.

A £150 council tax rebate for 80 per cent of all homes in England.

The rise in energy bills will start in April, at the same time as a 1.25 percentage-point increase in payroll taxes is due to kick in to fund efforts to clear a backlog in Britain's National Health Service and pay for social care. BLOOMBERG