Confusion over £400 energy discount for Northern Ireland

Uncertainty surrounds whether a UK government scheme to help struggling families could be held up in Northern Ireland by the ongoing Stormont deadlock.

Uncertainty surrounds whether a UK government scheme to help struggling families could be held up in Northern Ireland by the ongoing Stormont deadlock.

A £400 discount for energy bills was one of two measures announced by Chancellor Rishi Sunak yesterday.

Separate ‘cost-of-living payments’ announced by the chancellor – worth up to £650 – will go ahead regardless of whether Stormont is restored, but doubts have been cast on whether the energy bill discount can be made available without a government here.

DUP leader Sir Jeffrey Donaldson with party colleagues Jonathan Buckley, Gavin Robinson and Gordon Lyons in the Great Hall after their meeting. Picture by Jonathan Porter/PressEye

The one-off ‘cost-of-living payments’ and the ‘energy bill support scheme’ are both to be funded by an additional tax on the profits of energy companies, Mr Sunak said.

Finance Minister Conor Murphy said politicians in Northern Ireland are now unable to spend over £430m due to the absence of power-sharing.

Mr Murphy complained too that the government has not cut VAT on energy bills which “would have helped many others in society”.

The DUP’s Sammy Wilson said: “I agree: there should be a VAT cut on energy bills.

“But our case would be helped massively if his party stopped calling for the ‘full implementation’ of the NI Protocol. The protocol is the reason why the government has not cut energy VAT.

“And the one tax cut the government has delivered on energy efficiency [reducing tax this month on installing things like solar panels] could not be given to Northern Ireland because of the protocol.

“Rather than grandstanding in the NI Assembly with pointless recalls, Sinn Fein would be better to join us in getting the Pprotocol replaced with arrangements which work for Northern Ireland.”

He added that one way the Treasury could reduce energy costs would be “a holiday from the green levies which form more than 10% of our bills”

Overall, the announcement of the extra funding and the windfall tax on energy companies’ profits has received a warm welcome in Northern Ireland.

Sammy Wilson said: “The DUP has been pressing the government for several months to find help for households by a ‘windfall tax’. After all, the energy companies have amassed enormous profits as a result of the macro political environment rather than any commercial decision.

“I am glad the government has heeded our calls and opted for targeted intervention rather than a universal approach.”

He added: “I hope however, that the payment can make its way to the squeezed middle where two parents are employed full time, paying a massive childcare bill, not qualifying for benefits but being pressed hard by rising costs.

“We will be scrutinising how this money will be paid and working to ensure it reaches those who need it most.”

Sinn Fein Finance Minister Mr Murphy said: “I am glad the British government has at long last intervened to provide support to citizens. For some time I have been calling on the chancellor to impose a windfall tax to ensure that the most vulnerable in society are supported through this cost of living crisis.

“It is welcome news that support will be directly provided to many low-income households on benefits, pensioners and individuals receiving disability benefits. However, it is disappointing that the chancellor has offered no assistance for businesses which are also facing increased costs including extra fuel and energy costs coupled with additional National Insurance contributions.”

He added: “At a time when households and businesses are facing spiralling fuel and energy costs, today’s statement fails to reduce VAT on energy bills – this would have helped many others in society.”

Former UUP leader Steve Aiken, meanwhile, said: “The announcement that the chancellor has acted to try and help alleviate the cost-of-living crisis is to be welcomed. That he listened to the concerns of the least well-off and the most vulnerable in our society is to be welcomed. This £15 billion package is a substantial uplift, although with rising energy and food costs, we may have to further revisit this for additional support in the autumn.”

Mr Aiken raised concerns that the £14 million to be allocated through the Barnett formula following the ‘household support fund’ could end up as “just another figure to be added to the £400 million sitting waiting for the restoration of government here”.

SDLP MLA Matthew O’Toole, meanwhile, blamed the DUP for the uncertainty surrounding the £400 energy bill discount. “People who are dealing with spiralling food, fuel and energy bills need this funding, but once again it is shrouded in uncertainty for people here due to the DUP’s refusal to do its job,” the South Belfast MLA said.