“It is only because of the strength of our United Kingdom that we are able to afford interventions to deal with, for instance, the cost of living, providing more than £3,300 for every single family in our United Kingdom.”
At Prime Minister’s Questions on 17 May, Deputy Prime Minister Oliver Dowden claimed the government has provided “more than £3,300 for every single family” in the UK to help with the cost of living.
This appears to be incorrect. The Cabinet Office hasn’t responded to our queries about the figure and has failed to provide evidence to substantiate it. But other ministers and the Treasury have repeatedly used the same £3,300 figure in a different way when talking about cost of living support.
The Treasury has confirmed to Full Fact that its £3,300 figure is the total cost to the government of various policies covering the 2022/23 and 2023/24 financial years, including energy and cost of living support plus some benefits and tax changes, divided by the number of UK households. So it’s the average provided per household—suggesting the amount provided for some households is more, and for others less—not the amount provided for “every single family”.
Ministers should take care to make accurate statements about what support has been provided, to avoid causing confusion for families. If the Deputy Prime Minister cannot back up this claim with evidence, it should be corrected in keeping with the Ministerial Code.
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Where does the Treasury’s £3,300 figure come from?
The Treasury told Full Fact its £3,300 figure was calculated by dividing the total government support to help households with rising bills in 2022/23 and 2023/24 (which it has put at £94 billion) by the number of UK households (an estimated 28.2 million in 2022).
Full Fact has not seen the Treasury’s exact calculations, but it confirmed the following policies are:
- Energy Price Guarantee
- Energy Bills Support Scheme
- Support for domestic heat network consumers on non-domestic contracts
- Removing premium on prepayment meter customers
- Cost of living payments for households on eligible means-tested benefits, pensioner households and individuals on eligible disability benefits
- Council tax rebate
- Household support fund
- Benefits uprating
- Raising the benefit cap
- Changes to universal credit childcare support
- Reduction in the universal credit taper rate and increase in work allowances
- Fuel duty cut
- Freezes to fuel duty and alcohol duty
- Increase to draught relief
- Increase to national insurance contributions primary threshold and lower profit limit
- Increase to the threshold at which class 2 national insurance contributions are paid
We’ve broadly matched the £94 billion estimate to publicly available costings and estimates from the Office for Budget Responsibility (OBR) and the Treasury itself.
A large proportion of the Treasury’s figure comes from energy support measures, including the Energy Price Guarantee, which the OBR estimates will cost £27 billion over its lifetime, and the Energy Bills Support Scheme, which had an estimated total cost of approximately £12 billion. As part of its energy support package the government also introduced a £150 council tax rebate for properties in council tax bands A-D, costing around £3 billion.
The total also includes targeted cost of living payments worth roughly £19 billion altogether—this includes one-off payments of £650 in 2022 and £900 in 2023 to around eight million low income households, £300 each year for around eight million pensioners and £150 each year for around six million people claiming disability benefits.
The rest of the £94 billion is made up of various changes to benefits and taxes since 2022. These include raising the benefits cap and rate in line with inflation, increasing Universal Credit (UC) childcare support and introducing up-front payments, raising the National Insurance (NI) starting thresholds and reducing NI contributions for lower-earning self-employed people, reducing the UC taper rate, freezing alcohol duty and extending the freeze and 5p cut to fuel duty.
What about Mr Dowden’s claim?
If Mr Dowden was intending to quote the same £3,300 figure which has been widely used elsewhere in government, he was wrong in two ways.
Firstly, the £3,300 figure refers to households, rather than families as Mr Dowden said. In 2022, there were 19.4 million families in the UK, as opposed to 28.2 million households. (Families are a subset or portion of a household, as more than one family can live in a household.)
Secondly, Mr Dowden said the government has provided “every single family” with over £3,300 in support, which is not what the Treasury says its estimate shows, even in relation to households rather than families—it is an average, rather than a minimum.
We’ve not seen any estimate for the minimum amount provided for all households or families. We asked the Treasury about this but did not hear back.
The nature of the policies included in the Treasury’s £94 billion figure means not all households will benefit equally. While some policies, such as the Energy Bills Support Scheme, were available very widely, many of the cost of living interventions were intended to specifically support vulnerable households who had to meet certain criteria to be eligible.
Likewise, the amount provided for each household or family in more widely available support, such as the Energy Price Guarantee, will have varied depending on a number of factors, such as energy usage and income.
Of course, it is possible Mr Dowden was referring to some other data about the impact on families specifically, rather than households, but the government hasn’t suggested this.
As there are fewer families than households, the average amount per family, using the Treasury’s methodology, would be higher—a bit over £4,800 rather than £3,300. We’ve not been able to rule out that the minimum provided for every single family might be in excess of £3,300. However the government hasn’t provided any evidence to suggest that’s the case.
Which policies should be counted as cost of living support?
Another consideration is whether all the policies included in the £94 billion cited by the Treasury could reasonably be said to count as cost of living support, rather than other general budgetary changes.
In March 2023 the OBR estimated the policy package in response to the rise in energy prices and cost of living totaled £78.2 billion in 2022/23 and 2023/24, including £7.8 billion in business support. Excluding the business support, the OBR’s estimate suggests a £70.4 billion support package for households.
One reason for the difference with the Treasury’s figure is that the OBR did not include benefits uprating as a cost of living measure. The uprating increased benefits by 10.1% in line with inflation and cost the government £11 billion (certain benefits are required by law to be uprated at least in line with price increases—however the particularly high rate of inflation over the past year means fulfilling this requirement has come at a higher cost to the Treasury than in other years).
The OBR also didn’t include last year’s increase to National Insurance Contribution thresholds, or freezes to fuel duty and alcohol duty, all of which were included in the Treasury’s £94 billion figure.
Image courtesy of Simon Dawson