Government to reportedly announce energy bills rebate

The outlet says the Prime Minister and Chancellor Rishi Sunak have agreed to a “rebate and clawback” scheme for energy firms, the loans for which will be underwritten by the taxpayer. Companies will then pass the money on to every household in Britain in the form of a rebate on energy bills. 

Businesses will recoup the money from consumers in subsequent years to pay back the loans. Sources in the industry told The Times that they believe the government may offer companies access to £6bn in loans - equivalent to a rebate of £200 for every household. 

A government source told the outlet: “This is not about propping up the balance sheets of energy companies. Every penny they get in loans will be passed on to consumers in the form of rebates.” 

The Prime Minister and the Chancellor are also expected to announce more targeted measures for poorer households, including an extension of the warm homes discount. 

It comes at the start of a year which is expected to see record increases in the UK energy price cap. According to Cornwall Insight, the current winter cap level of £1,277 - which is itself a record high - is expected to rise by 50% this summer, going up to approximately £1,915 per annum, rising still further to approximately £2,300 per annum in the winter of 2022/23.

Since August 2021, 26 suppliers have gone bust following the record wholesale gas prices in the UK - reaching as high as 450p per therm just before Christmas. In addition to this, Bulb - the UK’s seventh largest energy company - has entered into special administration, with the government announcing at the end of November it had set aside £1.69bn. 

These collapses, according to research from Investec at the start of December, could cost households £120 each.