Treasury Minister David Ashford this morning announced a financial support package for the low paid and vulnerable in response to an imminent rise in home-heating costs.
The announcement was made prior to Tynwald agreeing to follow the recommendation of the gas regulator, the Communications and Utilities Regulatory Authority, and approving an increase in the maximum tariffs in the Gas (Tariff Fixing) Regulations 2021 by 2.1p per unit.
The change will represent a 27.5% increase to mains gas and LPG heating tariffs, with average consumers expected to pay an additional £31.50 a month.
The overall cost of the support package could be worth up to £1 million, paid over two instalments to coincide with Manx Gas’s billing schedule in January and March.
The Treasury Minister told Members: ‘I’d like to take this opportunity to confirm to this honourable court Treasury’s intention to provide additional financial support to help those on the lowest incomes to meet the likely increase in their gas bills over the winter period. This additional support would be provided through the Social Security Winter Bonus scheme, which provides for lump-sum payments to be made to certain recipients of income-related benefits in January each year.
‘For income support recipients who would ordinarily qualify for the £350 Winter Bonus, the amount would be increased by £100 – to £450. But Treasury does recognise that not everyone in receipt of income support currently qualifies for the winter fuel payments. So for certain other Income Support recipients and Employed Person’s Allowance recipients who aren’t currently eligible for the Winter Bonus, they would get a £100 winter bonus payment if, among other things, they are responsible for the payment of housing costs.
‘The use of benefits as a measure can sometimes be a blunt tool, and can lead to cliff edges where people are just outside of the qualifying income threshold but still struggling. I am therefore also committing to introducing a Variable Rate Winter Bonus, targeted at people who have incomes just above income support levels, which would be worth between £25 and £75 depending on individual circumstances and income.’
The support will be available to all those in receipt of the relevant benefits, not just gas customers, with the aim of providing protection against any potential rise in costs of other fuel sources over the winter.
The cost of the initial package, with payment in January, is estimated to be £500,000.
Depending on how home-heating costs are affected over the coming months, consideration will be given to providing an additional Winter Bonus in March. This would require approval from Tynwald in February and may lead to further expenditure of approximately £500,000.