Opinion

Rishi Sunak's energy bills support won't reach the people who need it most

People on the lowest incomes may lose out due to the government’s focus on council tax, writes the Trussell Trust's Joe Farnworth-Mayers.

People on low incomes could miss out just as things become more affordable. Image: Parliament/supplied

In saying “we are deliberately not just giving support to people on benefits”, chancellor Rishi Sunak suggested his response to the energy price cap rise recognised the needs of the people who will be hardest hit by spiralling costs. This is far from the truth.

Support through delayed loans and council tax rebates are neither an effective way to target, nor quickly reach, people on the lowest incomes for whom essential costs are already unaffordable and set to get worse.

There are several ways in which people at the centre of the cost-of-living crisis, on the lowest incomes, may lose out due to the government’s focus on council tax. People on low incomes living in higher band properties (often areas with high-cost housing like London), will miss out on automatic support altogether. Instead, they must rely on local authorities distributing part of a new £144 million discretionary pot. When local authorities are already facing stretched budgets and limited administrative capacity, this could easily lead to people slipping through the cracks.

For some people in the private rented sector, a person’s landlord is responsible for the payment of their council tax bill, which could mean that that they won’t see the benefit of the council tax rebate in their bank account.

And basing support on the council tax band of a person’s home – bands which are based on property evaluations from the 1990s – will mean many who are struggling most to cover household bills will miss out, while others who might be able to weather the costs will gain.

That is before we get to the £200 loan for energy bills, which won’t be seen until the autumn. Taken together, this simply is not a just or sufficient response to support people who may already be struggling to afford the essentials we all need to eat, stay warm and dry, and keep clean.

There is a mechanism the Chancellor could have used which is specifically designed to target the £9bn of funding to those that will struggle to shoulder these further essential costs the most: our benefits system. He has chosen not to.

The experience of the pandemic has proven that when the government wants to, it can act decisively to protect people from falling into financial emergency. However, this announcement is yet another package in a long line of short-term firefighting measures, which has no long-term vision to tackling the scale of the millions of people who are already facing impossible decisions between heating and eating.

With inflation reaching a thirty year high, and set to increase further this spring, the government needs to look beyond this short-term and poorly targeted support. To help people who will be hardest hit by the cost-of-living crisis, the government must urgently bring benefits in line with the true cost of living this April, or risk pushing and trapping people into further crisis. This means increasing payments by at least 6 per cent instead of the planned 3.1 per cent.

This would be a first, and vital step, towards ensuring our social security system can act as the lifeline it needs to be. Only then will we be able to end the need for food banks in the future.

Joe Farnworth-Mayers is a policy officer at the Trussell Trust. @TrussellTrust

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