UK energy price freeze and tax cuts will give wealthiest families 'twice as much support’

UK energy price freeze and tax cuts will give wealthiest families 'twice as much support’

The intervention comes at a time when the specifics of the new prime minister's plan to assist suffering households are still unknown

Liz Truss's proposals for a freeze on energy prices and significant tax cuts will provide twice as much financial assistance with living expenses to Britain's wealthiest households as to its poorest households, as per a top think tank.

The Resolution Foundation claimed that when combined with the tax cuts promised during her leadership campaign, the prime minister's energy plan, which was unveiled only hours before word of the Queen's passing last week, would come with a "colossal" price tag for taxpayers.

According to the report, the government's "energy price guarantee" and national insurance cuts would provide the richest tenth of UK households with an average of £4,700 in support, compared to just £2,200 for the typical home in the bottom tenth.

The intervention comes at a time when the specifics of the new prime minister's plan to assist suffering households are still unknown because she decided to wait until a mini-budget, which is anticipated to take place next week, to release the costs associated with her proposal.

The Resolution Foundation estimated that the idea to cap a two-year increase in the average home energy bill to £2,500 would cost about £120 billion. It cautioned that Truss's strategy to avoid a new windfall tax on energy producers would mean passing along the expense to taxpayers, with as little as £1 in every £12 spent on energy assistance for households being recovered directly from higher taxes on energy corporations.

The energy price guarantee, financial help for all households, and additional one-time payments for those receiving means-tested benefits, according to the think tank, will bring the average level of support for homes to £2,000 this year. When taken as a whole, it claimed that both wealthy and poor households received an equivalent amount of help.

UK energy price freeze and tax cuts will give wealthiest families 'twice as much support’
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However, measures to roll back national insurance tax rises put in place in April will help wealthier people much more next year. It was stated that this will "skew support towards the very highest-income households," in addition to the general support provided by the energy price freeze, which will benefit households with the highest gas and electricity bills.

The chief executive of the Resolution Foundation, Torsten Bell, stated: "Last week, the prime minister announced a simply colossal energy support package to avert a catastrophe in living standards this winter.

With prior announcements, the help totals more than £2,200 for each home in Britain. It was a large, courageous move. Families should yet prepare for a challenging winter, with wealthy households receiving twice as much cost-of-living assistance as less fortunate households the next year.

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