Scotland to receive extra £290 million as Rishi Sunak unveils plan to help with energy costs

Scotland is set to receive an extra £290 million as Rishi Sunak unveiled UK Government plans to help with energy costs.

The funding comes as the chancellor announced a new support package after Ofgem announced households face a £693 energy bill rise.

Likely to impact 22 million households across Great Britain, the decision applies to those who are on their energy supplier’s default tariff.

Shortly after the announcement, Mr Sunak promised to “take the sting out” of the price rises.

Chancellor Rishi Sunak speaking in the House of Commons where he outlined the government support for consumers for the rising costs of energy after regulator Ofgem announced that the energy price cap will rise in April to £1,971, an increase of £693 for the average household.

He promised that all 28 households in Britain would get a £200 up-front rebate on their energy bills from October.

Mr Sunak also promised a £150 council tax rebate for homes in bands A to D, something he said would cover around 80% of homes in England.

As the Council Tax system is devolved, the devolved governments will receive total Barnett consequentials of around £565million.

This comprises around £290million for the Scottish Government, £175million for the Welsh Government and £100million for the Northern Ireland Executive.

The Chancellor said: “The price cap has meant that the impact of soaring gas prices has so far fallen predominantly on energy companies.

“So much so that some suppliers who couldn’t afford to meet those extra costs have gone out of business as a result.

“It is not sustainable to keep holding the price of energy artificially low.

“For me to stand here and pretend we don’t have to adjust to paying higher prices would be wrong and dishonest.

“But what we can do is take the sting out of a significant price shock for millions of families by making sure that the increase in prices is smaller initially and spread over a longer period.”

Shadow chancellor Rachel Reeves accused the Government of not doing enough.She said: “What do the Government offer? A buy now, pay later scheme that loads up costs for tomorrow.

“High prices as far as the eye can see – this year, next year and the year after that, give with one hand now and take it all back later. The party opposite used to talk about the nation’s credit card, well today we’ve seen the Chancellor force British households to load up their credit cards.

“By lending billions of pounds to energy companies, the Chancellor is gambling that prices are going to fall – but they could go up further in October. What then? Billions more loaded onto people’s bills?

“The best way of targeting support to those who need it most would be an increase to £400 and an extension to 9 million households of the warm homes discount, as Labour has proposed today. Their scheme today is a pale imitation of Labour’s, especially for the households and pensioners on the most modest incomes.”

Ofgem chief executive Jonathan Brearley had earlier defended the price rise.

He added: “We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet, and Ofgem will ensure energy companies support their customers in any way they can.”