To combat the cost-of-living crisis and sky-high energy bills, Chancellor Rishi Sunak has announced new measures including a £400 discount for households on energy bills.
Under these new measures, all households will receive the £400 discount, with eight million of the lowest income families in the UK receiving a one-off payment of £650.
These one-off payments will vary for vulnerable groups that also include the elderly and those with disabilities.
Disabled citizens will receive £150 to help with the cost-of-living crisis, with pensioners receiving £300.
Rishi Sunak has stated that the total worth of these new measures is close to £15 billion and takes government support this year for the cost-of-living to £37 billion.
Following criticism of the Conservatives from Partygate and the recent Sue Gray report, the Chancellor has agreed to implement a temporary windfall tax on oil and gas companies to fund these payments.
This tax will be at a 25% rate on the profits of these companies, with an aim to phase this out once prices plateau. Mr Sunak stated the step must be taken now, as these businesses make “extraordinary profits” from factors including the Ukraine war.
The Labour party has been a key supporter of a windfall tax, with Shadow Chancellor Rachel Reeves stating, “it shouldn’t take half a million pounds of publicly funded focus groups for the Chancellor to realise that helping families and pensioners is exactly the right thing to do.”
The levy on oil and gas giants is expected to bring in up to £5 billion, with raises in tax expected to accommodate the remaining increase in budget.
Disappointing to hear the chancellor again conclude by claiming to be cutting taxes. He emphatically is not. He is raising them, and to historically high levels.
I think that is the right thing to do. But his tax plan is to raise taxes not, as he keeps saying, to cut them.
— Paul Johnson (@PJTheEconomist) May 26, 2022
“Disappointing to hear the chancellor again conclude by claiming to be cutting taxes. He emphatically is not. He is raising them, and to historically high levels.
“I think that is the right thing to do. But his tax plan is to raise taxes not, as he keeps saying, to cut them,” tweeted Economist and Director of the Institute for Fiscal Studies, Paul Johnson.
“We need to make sure for those whom the struggle is too hard… they are supported”, stated the Chancellor.