Davey suggests ‘cheques in the post’ for those missing out on council tax rebate

Following suggestions that some 1.3 million households may miss out on the government’s recently announced Council tax rebate towards helping with rising energy bills, the Lib Dem leader Sir Ed Davey leader has this morning suggested that people should receive a £150 cheque in the post.

Where the two thirds of taxpayers in bands A-D who pay their council tax by direct debit are set to benefit automatically from the £150 rebate, it is estimated that as many as a fifth of those who don’t use direct debit will not take up the offer, saving the Treasury a potential £195 million. The figures emerged deep within (p 201-203) an Office of Budget Responsibility Report that accompanied last week’s Spring Financial Statement.

In response, the Liberal Democrats are this morning demanding that the government mail a £150 cheque to each household that doesn’t pay council tax by direct debit, to ensure no-one misses out.

The suggestion appears to mirror the idea of so called ‘helicopter money’ payments, where the government posts cheques direct to households, as has been advanced in the US both during the 2008 financial crisis and the recent Covid pandemic.

Council tax

Commenting on his proposal, the Lib Dem Leader said, “Often those who don’t pay council tax by direct debit are older and more deprived, meaning some of these households are likely to be among the most vulnerable in the country”.

Continuing, Sir Ed said, “People are facing sky-rocketing bills and plummeting living standards, but it looks like even the meagre support on offer from the Conservatives won’t reach those who need it most”.

In addition to the council tax rebate, the government has recently also announced its proposed ‘Energy Bills Rebate’.  This additional rebate will provide households with an upfront discount on their bills worth £200. Energy suppliers will apply the discount to domestic electricity customers from October, with the Government meeting the costs. The discount will then be automatically recovered from people’s bills in equal £40 instalments over the next five years.

The Consumer organisation ‘Which’ has previously suggested that a household which uses a medium amount of gas and electricity (defined as 12,000kWh gas and 2,900kWh electricity a year) could expect their bill to rise by around £693 a year from April this year.