The Chancellor of the Exchequer, Jeremy Hunt, has today unveiled the government’s spending and tax commitments for the coming years, with implications for personal and business finances alike. As one of the key drivers of inflation, energy was unsurprisingly one of the salient topics covered.
The key energy-related measures were as follows:
- The domestic Energy Price Guarantee, which caps the price of domestic energy use, has been extended for 12 months from 1st April 2023. The rate will increase however, from its current cap of £,500 per annum (for a typical domestic user) to £3,000. This continues to offer relief against wholesale market prices, which would normally be in the £3,500 to £3,800 per annum range.
- The business Energy Bill Relief Scheme is not covered by today’s Statement. The only commitment was to the already-known review during the rest of this quarter, with more to be announced regarding a possible extension of the scheme by Christmas.
- A windfall tax on oil and gas producers will increase from 25% to 35% and has been extended to March 2028.
- A new “temporary” windfall tax on electricity generation has been introduced, at a level of 45%, from January-23.
- The government has committed to the building of a new nuclear reactor at Sizewell C and contracts will be signed in the coming weeks.
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