Prime Minister Andy Burnham has defended the £100 energy payment set to reach 20 million households in council tax bands A to D in January, insisting it is "real help" that will land in bank accounts just when people "need it most."
The measure, unveiled by Chancellor John Healey in this week's Budget, is designed to support households ahead of an anticipated spike in energy bills this winter. The payment will cost £2.6 billion, and four groups of people have been confirmed as ineligible, including second homes.
Prime Minister responds to criticism
Following Wednesday's announcements, Mr Burnham was pressed to defend the support amid mounting criticism that it will barely scratch the surface of soaring bills. Campaigners and think tanks have branded the payment poorly targeted and insufficient to shield households from the energy cost rises forecast for January.
The Resolution Foundation think tank described it as "a terribly, badly targeted kind of support," noting that "there are lots of people who are doing OK who probably can manage without that money, and probably need to manage without that money if we're going to support the people we need to support at a time when we don't have a lot of money to throw around in the first place."
Nevertheless, the Prime Minister stood by the decision to extend the support to "the vast majority" of Britons and confirmed when the funds would reach people's accounts. Speaking during a Thursday visit to a Rolls-Royce factory in Derby, Mr Burnham said: "We're very focused on giving families as much breathing space as we possibly can."
"Often with a budget, people would have come home from work and said, 'Well, this doesn't help me. It's always for somebody else'. Well, if you're going to give that support to people in council tax bands A to D, that gets to the vast majority of the country. It is help, real help that will land in people's bank accounts in January."
Additional measures and energy bill forecasts
He further stated that ministers were "constantly" working to ease the cost of living, pointing to a number of additional announcements: "We've taken VAT off electricity bills, which will help people; £2 cap on bus fares next year and we're going to take standing charges off gas bills."
Chancellor Healey confirmed in Wednesday's Budget that the VAT reduction on electricity bills would be extended to July, with gas standing charges set to be moved to unit rates, and similar changes planned for electricity bills thereafter. Ofgem's price cap increased by 3.6% to £1,723 for a typical household on October 1, with a further rise of approximately 22% anticipated in January.
The Resolution Foundation stated the Budget's measures would not stop energy bills from climbing above levels witnessed during the previous energy crisis. Typical annual energy bills are projected to reach £1,750 after Government support in 2026-27, compared with £1,685 paid during the 2022-23 energy price surge following Russia's invasion of Ukraine.
The End Fuel Poverty Coalition stated the £100 payment would "barely dent" the predicted increase households face in January and that "because it is paid directly into household accounts in England, it may not even be spent on staying warm this winter."
How the payment will be made
Asked about the method selected for distributing the funds, Mr Burnham's spokesman told reporters: "We're offering support for households struggling with their energy bills through the council tax system because it's the quickest way to get money to the families who need it."
If you pay council tax by direct debit and reside in bands A to D, you don't need to take any action as the rebate will be paid straight into your bank account. If you don't pay by direct debit, your council will invite you to apply for the rebate directly. The government warns: "Nobody other than your council should get in touch asking you to claim the rebate. Only give out your personal information if you are certain it is your local council contacting you. If you're unsure whether a message is genuine, double check with your council."
Officials have confirmed that the payment will be made automatically, with an established system already in place to identify households that are eligible.
