The Office of National Statistics (ONS) has showcased the impact of the energy bills support measures on public sector borrowing with the October 2022 figure standing at £13.5 billion.
This is an increase of £4.4 billion on October 2021’s figure and also is the fourth highest October borrowing since monthly record began in 1993.
Over recent month the governmnet has unveiled a number of support schemes, including the Energy Bills Support Scheme (EBSS), which provides households with £400 over six months from October.
Additionally, last month, the Energy Prices Bill enshrined into law both the Energy Price Guarantee (EPG) – part of the government’s support for domestic customers – and the Energy Bill Relief Scheme – which provides support for businesses and other non-domestic customers.
According to Cornwall Insight, the EPG support scheme alone is anticipated to cost the government up to £140 billion.
The ONS’s October figures have shown the first tranche of the EBSS will cost the government £1.9 billion.
Payments for the EBRS for businesses also stared in October, but there was not yet an estimate available for its cost, noted the ONS
The EPG also came into play in October, capping energy bills for those on a standard variable tariff, to 34p/kWh for electricity and 10.3p/kWh for gas, inclusive of VAT, from 1 October. As such the average household will pay, £2,500 per year, with the government meeting any additional cost above this threshold.
Therefore we will see further public sector borrowing as a result of the energy crisis and the governmental support schemes when the cost of the EPG becomes clear.