Chancellor Rishi Sunak admitted high inflation is causing people “acute hardship” and announced a 25% levy to fund his £21bn package of measures – months after we called for a windfall tax
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After months of refusing to help people amid the cost-of-living crisis, the Tories finally acted the day after Sue Grey’s Partygate report.
Desperate to put the scandal behind him, Boris Johnson made a massive U-turn to impose a windfall tax on oil and gas giants.
Chancellor Rishi Sunak announced the 25 per cent levy to fund his £21bn package of measures. Mr Sunak had resisted calls for an emergency budget for weeks after his spring statement in March accused him of not being up to the task.
He finally admitted that high inflation was causing people “immediate distress” and claimed the government “would not stand by while there is a risk that some in our country will be thrown back so far that they may never recover “.
But for 8million of the poorest households on means-tested benefits, the package couldn’t offset October’s cancellation of the Universal Credit boost, which cost them £1,040 a year.
They will be better off £650 a year under plans announced yesterday, payment in two lump sums in July and Autumn.
Those with tax credits won’t receive their first payment until later this summer, with the second at the end of the year.
Labor shadow chancellor Rachel Reeves, who has been calling for a windfall tax and more support for months, said: “Today it seems like the chancellor has finally recognized the problems the country is facing.”
All UK households get a £400 rebate on energy bills as warns annual electricity and gas costs could reach £2,800 in October.
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Mr Sunak announced the grant would double from £200 to £400 and tore up plans to force people to pay back.
The £400 will be deducted from monthly utility bills by utilities over a six-month period from October.
Direct debit and credit customers have the money credited to their account, while customers with prepaid meters can have it loaded onto their meters or paid for using a voucher. Pensioner households eligible for the Winter Fuel Allowance will also receive a one-off payment of £300.
Those receiving non-means-tested disability benefits receive an additional £150.
Second home owners get £400 for each property. The Chancellor, who has three houses, plans to donate his £1,200 rebate to charity.
Households eligible for all the announced measures could receive an extra £1,650. A further £500million will be allocated to the council-managed fund to help households in need.
The government will raise £5bn from the windfall tax, which it calls a “targeted energy gains levy”, and finance the rest from borrowing.
Mr Sunak said the energy sector is making “extraordinary gains” due to rising global gas prices sparked by the war in Ukraine. Boris Johnson has repeatedly ruled out a windfall tax, forcing his MPs to vote against it three times, including just a week ago.
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Energy companies already pay 40% of their profits in taxes, but the levy, which takes effect immediately, will increase that to 65% by December 2025.
But the Chancellor left the back door open for companies to avoid much of the tax hike if they invest in the UK.
In a move that calmed nervous Tory MPs – and infuriated anyone concerned about climate change – they doubled the tax breaks companies can get for investing in new oil and gas exploration, from 46p for every £1 invested up to 91p.
The combined stock market value of Shell and BP rose by more than £3.3 billion after their shares rose more than 1% following the Chancellor’s announcement. Mr Sunak unveiled his package of measures as inflation hit a 40-year high of 9%.
TUC General Secretary Frances O’Grady said: “The Chancellor should have acted much sooner. His trembling and hesitation has caused millions of needless trouble and worry.”
Analysis by the New Economics Foundation found 23.2 million people face an average increase in the cost of living of £6,500 through October, despite the support package.
https://www.mirror.co.uk/news/politics/rishi-sunak-finally-helps-families-27077436 Rishi Sunak is FINALLY helping families 5 months after Mirror and Labor called for it