On 3 February 2022, the UK Government announced an Energy Bills Rebate package to help households to manage rising energy bills. The details of the rebate are described below.

  • “A £200 discount on their energy bill this Autumn for domestic electricity customers in Great Britain. This will be paid back automatically over the next 5 years.
  • A £150 non-repayable Council Tax Rebate payment for all households that are liable for Council Tax in Bands A-D in England.
  • £144 million of discretionary funding for Local Authorities to support households who need support but are not eligible for the Council Tax Rebate.
  • The devolved administrations are receiving around £715 million funding through the Barnett formula as usual where UK Government support doesn’t cover Scotland, Wales or Northern Ireland.”

Decisions on whether to include rebates, subsidies and discounts in our consumer price inflation statistics are not clear cut and are taken on a case-by-case basis. We aim to be consistent with the National Accounts, the Public Sector Finances, and other economic statistics. Decisions are based on international statistical guidance and practical considerations. More information on this is provided in section 9.2 of our Consumer Price Indices Technical Manual.

The formal Economic Statistics Classification decision on the recording of the Council Tax rebate scheme in England (the second component of the rebate) in the National Accounts and the Public Sector Finances statistics was announced on 28 February 2022 in Classification of the Council Tax rebate in England. Office for National Statistics (ONS) concluded that there is no reduction to Council Tax liability, and in accordance with the international guidance, the Council Tax rebate in England should therefore be classified as a payable tax credit, specifically a current transfer, paid by central government to households. The implication of this decision for consumer price inflation is that the rebate is not part of household expenditure and should therefore be treated as out of scope of the Consumer Prices Index including owner occupiers’ housing costs (CPIH) and Retail Prices Index (RPI). Council Tax is not included in the Consumer Prices Index (CPI).

The available information from the devolved administrations is that the support package in Wales mirrors that in England, and a similar approach will be taken in Scotland (though fewer details are available). At present, there appear to be no plans in Northern Ireland to apply the rebate to the rates bill in April 2022. We will continue to monitor the situation but based on current evidence, any rebate from the devolved administrations (fourth component of the rebate) will not affect the CPIH and RPI.

The third component - discretionary funding to support households who need support but are not eligible for the Council Tax rebate - is out of scope, as the support is by definition discretionary. It does not represent a payment for a good or service and, as such, has no price associated with it.

The Economic Statistics Classification assessment for the first component of the package, which is the proposed £200 discount on Autumn 2022 domestic energy bills, will be made when more information becomes available. Once the classification decision has been made, we will consider whether it affects consumer price inflation statistics (CPIH, CPI and RPI) and, if so, how the treatment can be consistently incorporated into those statistics.