The Chancellor announced an additional £500 million for the Household Support Fund from April 2022, on top of the £500 million already provided since October 2021, bringing total funding to £1 billion1. The fund, distributed by councils in England, gives small payments to help vulnerable households meet daily needs such as food, clothing and utilities2. The extension was announced on 23 March 20222.
The same statement set out a change to VAT on energy saving materials. The government said it would expand the scope of VAT relief available for energy saving materials and ensure that households having energy saving materials installed pay 0% VAT1. The Chartered Institute of Plumbing and Heating Engineering reported that the 0% rate applies to homeowners on insulation, heat pumps and solar panels in England, Scotland and Wales, and would stay in place for five years3. Carbon Brief reported that solar panels, heat pumps, insulation, and wind and water turbines were previously out of scope under EU rules, and that the 0% rate applies both to materials and to the cost of installation4. The Treasury said a typical family having rooftop solar panels installed would save more than £1,000 on installation and £300 a year on energy bills4.
Other measures in the statement included a temporary cut of 5p per litre in fuel duty on petrol and diesel for 12 months, taking effect from 6pm on 23 March4. The government said this was worth around £100 for the average car driver, £200 for the average van driver and £1,500 for the average haulier compared with uprating fuel duty in 2022-231. The National Insurance Primary Threshold and Lower Profits Limit was to rise from £9,880 to £12,570 from July 20221. The basic rate of income tax was to fall to 19% from April 20241.
The statement also set out the government's reading of the energy market. It described the UK as "a net energy importer with a high dependence on gas and oil"1. It said global oil prices rose 9.3% between the week beginning 14 February and the week beginning 14 March, and that UK and European wholesale gas prices increased by more than 30% over the same period1. Petrol pump prices were at record highs, having increased by almost 12% over the past month1. Inflation was forecast at 7.4% in 20221.
"the government is providing an additional £500 million for the Household Support Fund from April, on top of the £500 million already provided since October 2021, bringing total funding to £1 billion."
| Measure | Detail |
|---|---|
| Household Support Fund | Additional £500 million from April 2022; £1 billion total1 |
| VAT on energy saving materials | 0% for households, England, Scotland and Wales, five years3 |
| Fuel duty | 5p per litre cut, 12 months, from 6pm on 23 March4 |
| National Insurance threshold | £9,880 to £12,570 from July 20221 |
| Basic rate of income tax | 19% from April 20241 |
Why it matters for households
The Household Support Fund reaches homes through councils rather than through energy suppliers, and the guidance states that households in need should contact their local council to find out more and apply2. For a household on a low income, that route is separate from the energy price cap and from the £9 billion package announced in February to help with rising energy bills1. The fund is for essentials including utilities, so it can cover a gap in a bill that other support does not2.
The VAT change affects the upfront cost of work that reduces how much energy a home needs. Insulation, heat pumps and solar panels fall within the 0% rate for households in England, Scotland and Wales3. The government's own estimate puts the saving on a typical rooftop solar installation at more than £1,000, with £300 a year off energy bills4. That is a reduction in the cost of buying the measure, not a payment towards bills already incurred, and it does not lower the unit price of gas or electricity.
The statement frames the UK as a net energy importer with a high dependence on gas and oil1, which is the context in which home energy efficiency and on-site generation are treated as matters of energy independence. The government said it would soon set out an energy security plan, including measures across hydrocarbons, nuclear and renewables1. No detail of that plan was published in the statement.
What happens next
The Household Support Fund extension ran to 30 September 2022 under the March announcement2. The government said the VAT changes would take effect from April 20221. The National Insurance threshold change takes effect from July 2022, and the basic rate cut from April 20241. The energy security plan had not been published at the time of the statement1.
Households in England can find the route to the fund through Help for Low-Income Households in England, and equivalent arrangements in Northern Ireland are covered under Help for Low-Income Households in Northern Ireland. Support for homes with medical equipment or heating needs is set out under Vulnerable and Medically Dependent Households. The wider set of grants and schemes and the household audiences pages carry the standing guidance.
Sources4 cited
- Spring Statement 2022, assets.publishing.service.gov.uk
- Household Support Fund: guidance for local councils - GOV.UK, gov.uk
- Tax cuts for green technology | CIPHE, ciphe.org.uk
- Spring statement 2022: Key climate and energy announcements - Carbon Brief, carbonbrief.org