Energy bills news – live: Sunak announces 25% windfall tax on oil and gas companies

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Sunday Times Rich List: Rishi Sunak and wife join elite with £730m fortune

In a major U-turn, Rishi Sunak has announced that he will impose a windfall tax on the profits of oil and gas companies to fund measures to help people struggling with the cost of living crisis.

Following criticisms of inaction in the face of soaring prices, the chancellor unveiled a £15bn plan on Thursday, including a £650 payment for eight million of the worst-off households, a one-off £300 payment to eight million pensioner households and £ 150 each to six million disabled people.

Mr Sunak also scrapped his £200 energy bills loan, replacing it instead with a £400 grant, available to all households. He said that tax breaks for innovation would ensure the one-year windfall tax did not reduce investment in green power.

Shadow chancellor Rachel Reeves said Mr Sunak’s announcement showed the Labor Party was “winning the battle of ideas”, adding: “This government’s dither and delay is costing the country dearly.”

As he began his statement to MPs, Mr Sunak was heckled with shouts of “what took you so long” and “about time”.

Key PointsShow latest update 1653569345Sunak announcement ‘another missed opportunity’, Sadiq Khan says

Sadiq Khan has described Rishi Sunak’s announcement today as “another missed opportunity to prove the Tories are truly serious about tackling this cost of living crisis”.

The London mayor said there was “so much more” the government could do to help people, including handing him powers to freeze private rents in London.

Andy Gregory26 May 2022 13:49

1653569006Tory former energy minister welcomes ‘proportionate’ windfall tax

A former energy minister and Conservative backbencher has welcomed the announcement of a windfall tax on oil and gas companies.

Chris Skidmore, MP for Kingswood and chairman of the all party parliamentary group on the environment, said: “The levy today on oil and gas is proportionate to the supernormal profits they are taking and the challenge ordinary households face.

“At the same time, investment in green technologies of the future is being protected, which is welcome.”

He added: “The government is recognising the only viable long-term plan to cut emissions and cut bills is net zero. Moving forward, we should look at a new multi-annual net zero fund to help get off volatile gas, support renewables, insulate homes, and keep energy bills down permanently.”

Andy Gregory26 May 2022 13:43

1653568939Measures ‘not enough’ to help the poorest in UK, SNP says

Chancellor Rishi Sunak’s £15bn economic support package is “not enough” to help the poorest in society, the SNP has said.

“It’s quite amusing to hear the Chancellor talking about this being ‘timely’,” SNP work and pensions spokeswoman Kirsty Blackman told MPs.

“I mean it is timely it just happens to have happened in the week of the Sue Gray report, it just happens that that report came out yesterday and the Chancellor has suddenly realised today that people are really struggling, that he’s suddenly realised he needs to announce something about it.”

Ms Blackman added: “I don’t understand why he has announced only a £15bn package. He has got £28bn of fiscal headroom in public sector net debt, he has got £32bn of fiscal headroom in balancing the current budget, those are the OBR’s figures from March.

“Yet he is refusing to spend that money now in the timely, targeted way that it is needed now for people.”

Mr Sunak, in his reply, said: “I know for some people it’ll never be enough but that’s why the SNP’s plans would leave Scotland with, I think, a 20 per cent budget deficit and bankrupt the country; that’s not something we will ever do for the people of Scotland or the United Kingdom.”

Andy Gregory26 May 2022 13:42

1653568780Tory former minister says ‘we need to think about tax burden in years ahead’

Conservative former cabinet minister Robert Jenrick has said “we need to think about the tax burden” in the years ahead because Rishi Sunak’s announcement is “heavily redistributive”.

Mr Jenrick told MPs that the chancellor had made “all the right judgements” on providing support for the poorest households in the face of a “period of extreme hardship”, but warned that a “steady hand” was needed from the Bank of England to “inject some confidence into the economy which is facing a recession or a long-period of stagnation”.

He said: “We do need the supply-side reforms that he alludes to urgently, we need delivery on the energy plan that the chancellor and the prime minister have set out, and we need to think about the tax burden in the years ahead because the announcement he has made today is heavily redistributive.

“And that’s a good thing for hard-working families and the vulnerable but it is being paid for by higher taxes on higher earners and businesses and in the long-term we need to address that.”

Andy Gregory26 May 2022 13:39

1653567690 Shadow chancellor urges Rishi Sunak to adopt ‘big Brexit bonus’

Shadow chancellor Rachel Reeves has asked the government to adopt more of Labor’s ideas to help with the cost-of-living crisis.

She told the Commons: “I know that the chancellor has adopted two of our ideas today, but can I ask why he has not adopted a third – a cut in VAT on energy bills? It was once touted as the ‘big Brexit bonus’, but he has ditched that too.”

Ms Reeves claimed government policies rarely lasted “more than a few months”, adding: “We pushed for a windfall tax, they adopted it. We said the buy now, pay later scheme was wrong and now they have ditched it.”

Ms Reeves also asked the chancellor whether households would still need to pay supplier-of-last-resort costs for electricity suppliers who had “gone bust”.

Andy Gregory26 May 2022 13:21

1653567474Payment of £650 to go directly to people’s bank accounts

Rishi Sunak has said that the payment of £650 to be received by roughly 8 million households will be made by the Department for Work and Pensions in two lump sums.

“The first from July, the second in autumn, with payments from HMRC for those on tax credits following shortly after,” the chancellor said.

Mr Sunak said the payments will be sent straight to people’s bank accounts.

Andy Gregory26 May 2022 13:17

1653567260One-off payments will ‘stimulate the economy’, senior Tory MP says

The Conservative chair of the Treasury Select Committee has said she welcomes Rishi Sunak’s announcement “broadly”.

Mel Stride told MPs: “It is a very significant intervention that [the chancellor] has made, channelling billions of pounds in a targeted series of transfer payments to those who most need it.

“Similar approaches were taken in the pandemic, there were many who missed out from support, who fell through the gaps, I note the additional increase in the household fund of half-a-billion, which is welcome.”

Mr Stride said the transfer payments will “stimulate the economy, granted they will come with some tax increases as well”.

Andy Gregory26 May 2022 13:14

1653567033Rachel Reeves attacks Boris Johnson over windfall tax U-turn

Conservative MPs cannot trust Boris Johnson after his government announced a new oil and gas windfall tax, Labor’s shadow chancellor has said.

Rachel Reeves said: “Every day for five months, the prime minister sent Conservative MPs out to attack the windfall tax and yet defends an increase in taxes on working people.

“He has made them vote against it not once, not twice, but three times—and for months he has sent his MPs to defend the litany of rule-breaking in Number 10 Downing Street set out in the Sue Gray report yesterday.

“There is a lesson here for Conservative MPs – you can’t believe a word that this prime minister says.”

She added: “Labour called for a windfall tax because it is the right thing to do. The Conservatives are doing it because they needed a new headline.”

Andy Gregory26 May 2022 13:10

1653566909Lib Dem leader criticizes Sunak

The Liberal Democrat leader Sir Ed Davey has attacked the chancellor as “like a thief who steals your car and then wants you to be grateful when he returns the steering wheel”.

Andy Gregory26 May 2022 13:08

1653566807Government’s ‘dither and delay has cost country dearly’, Rachel Reeves says

The government’s “dither and delay has cost our country dearly”, Labor’s shadow chancellor has said.

Rachel Reeves told the Commons: “Here he is once again, the Treasury’s one-man rebuttal unit, the chancellor himself.

“For months it has been clear that more was necessary to help people bring their bills down. So what took this government so long? Every day that they have refused to act, £53m more added to Britain’s household bills during this cost-of-living crisis.”

She added: “This government’s dither and delay has cost our country dearly.

“On this side of the House, we welcome the fact that the government is finally acting on our calls to introduce a windfall tax. And it is good to see the SNP U-turning today, too, and saying they are also in favor of a windfall tax on oil and gas profits. Well done to the SNP.”

Andy Gregory26 May 2022 13:06

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