Tomorrow the cost of living will be announced as the Tories scramble to move away from Partygate

Rishi Sunak is set to make a cost-of-living statement to the House of Commons in which he could announce £10billion in new spending – with Tory sources claiming the early announcement would mainly help poorer families

Boris Johnson and Rishi Sunak
Boris Johnson and Rishi Sunak

Rishi Sunak is set to announce fresh living aid on Thursday as Boris Johnson desperately tries to get away from Partygate.

The Chancellor will unveil a package said to be worth £10bn, funded by a windfall tax on oil and gas giants, in a statement in the House of Commons late this morning.

Sources said the deal was signed today by Mr Sunak and Boris Johnson – who unashamedly said people should “move on” and told MPs he planned not to spend another “second” talking about his breaking the law in Covid to speak.

The announcement was brought forward after the Queen’s jubilee and an unexpected tax would be a big about-face months after Labor called for it.

A Tory source said the case for a windfall tax had been “rigorously tested” at the Treasury to ensure “the gain is worth the pain”.

The source said the “vast majority” of aid announced tomorrow will go to the poorest Brits, but some would also go to middle earners.

Sources said the deal was signed by Mr Sunak and Boris Johnson today



They said: “We are acutely aware that virtually everyone is suffering and we have a need to help families who would normally be more than able and willing to help themselves.

“But the kind of spikes in certain bills are such that even proud, self-sufficient families, many who believe are fairly wealthy, are feeling the pinch.”

A Treasury spokesman confirmed tonight: “The Chancellor was aware that our response will vary as the situation evolves, with the most vulnerable being his top priority.

“He will give more details tomorrow.”

The Government is expected to announce a £10billion package to deal with the cost of living crisis – believed to be an increase in the Warm Home Discount Scheme.

Under existing plans, the scheme should make £150 in payments to nearly three million vulnerable households next winter.

More council tax help and potential benefits are also believed to be on the table.

The package is likely to be funded in part by an increase in the “extra levy” levied on oil and gas producers in the North Sea.

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A supposed additional tax on power generation companies is understood to have been dropped, at least for now.

Alongside the announcement could be a glimpse of fuel traders’ profits after pump prices hit a record high and critics accused some forecourts of failing to fully pass on the Chancellor’s 5p a liter tariff cut.

The Office for Budget Responsibility forecast that the Treasury would rake in £26.2 billion from fuel taxes this financial year.

The Mirror understands a meeting was held with Boris Johnson and energy companies on Monday this week where he supported the need for investment.

Calls for a UK windfall tax may have been clouded by the fact that oil giants like BP and Shell collect most of their taxes abroad rather than in the North Sea.

Critics fear the announcements don’t go far enough.

The End Fuel Poverty Coalition has repeatedly called for an emergency budget that included a £1,800 payment to the lowest income households.

The Mirror understands a meeting with Boris Johnson and energy companies took place on Monday this week


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A spokesman said: “Previous government action to tackle fuel poverty does not scratch the surface.”

Ministers have ruled out bringing back the £20-a-week Covid boost to Universal Credit, but some have claimed they could prefer an annual increase or adjust thresholds to help people get to work.

Ministers have reportedly even discussed cutting VAT on energy and fuel – again an idea put forward by Labor and rejected on several occasions by Boris Johnson.

But any help could be gobbled up for 5.7million public sector workers after ministers signaled they will receive pay rises below inflation – currently 9%.

Environment Secretary George Eustice warned today that it is “quite important to exercise restraint in paying the public sector” as “if we continue to borrow and spend during high inflation” the problem could worsen.

And No 10 said a cabinet meeting yesterday was told: “The risk of triggering higher inflation must be part of the considerations when deciding payroll payments this year.”

Boris Johnson’s spokesman did not rule out overruling the review bodies’ decision if they propose increases above the inflation rate.

Meanwhile, the Institute for Fiscal Studies warned that the expected increase in energy bills in October this year is likely to push the cost of living for the poorest households to 14%.

The IFS recently predicted that the rate for those with the least money could reach almost 11%.

But it issued an update today after energy regulator Ofgem said this week its price cap could rise by a further £800 to £2,800 in the autumn.

The 14% is much higher than the 8% inflation rate predicted for the wealthiest households.

Heidi Karjalainen, research economist at IFS, explained: “As poorer households spend a larger proportion of their budgets on gas and electricity, this increase is likely to hit poorer households harder.”

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