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_ Rishi Sunak FINALLY announces cost-of-living package

_ Rishi Sunak FINALLY announces cost-of-living package

Rishi Sunak finally unveiled a fresh £15billion cost-of-living bailout today with every household expected to get hundreds of pounds off their sky-rocketing bills.

The Chancellor announced a new package of help for struggling families after watchdogs warned that the Ukraine crisis means energy costs are set to soar again this Autumn - by more than 40 per cent.

He confirmed that the government is performing an extraordinary U-turn on imposing a 25 per cent windfall tax on the surging profits of oil and gas firms, following weeks of wrangling in Cabinet. 

But denying he had caved into Labour demands he said the levy - which should raise £5billion - will be 'temporary' and there will be big tax breaks for companies that invest.  

The £200 per household state loan for energy bills - which was due to take effect in October be paid back over the next four years - is being converted to a permanent grant and doubled to £400 to take the edge off the misery of spiking inflation for 27million homes. 

Mr Sunak said eight million households on benefits will also get a £650 handout, paid in two stages in July and autumn - which will cost the Treasury £5billion.

It means that most of those families could be due a total of £1,200 over the coming months, including the previously-announced £150 council tax rebate for band A-D properties.   

Pensioners who get winter fuel allowance will receive £300 extra, and he confirmed that the triple-lock will be applied to the state pension this year - likely to entail a double-digit increase. People on disabled benefits will get an additional £150.

Mr Sunak set out the grim scenario with inflation at a 40-year high, and warned the government cannot 'solve every problem'.

He cautioned that inflation was becoming entrenched, saying: 'Over the course of the year the situation has evolved and got more serious.' 

But Mr Sunak said he would not allow people to be 'set so far back they might never recover' - boasting that cost-of-living support now totals £37billion this year.

Tories immediate raised concerns about where the money was coming from for the latest splurge, while there are worries that the spending could fuel inflation.  

Mr Sunak was heckled with Opposition shouts of 'what took you so long' and 'about time' after he began his statement by noting that high inflation is causing 'acute distress' for people in the country, adding: 'I know they are worried, I know people are struggling.'

He told the Commons: 'I trust the British people and I know they understand no government can solve every problem, particularly the complex and global challenge of inflation.

'But this Government will never stop trying to help people, to fix problems where we can, to do what is right, as we did throughout the pandemic.'

Ministers are also eager to move on from the Partygate scandal, after Sue Gray's report demanded Boris Johnson took responsibility for his staff boozing, vomiting and fighting in Downing Street when the rest of the country was under brutal lockdown restrictions. 

The Treasury have been dismissing claims that the package will be worth £30billion, but it is expected to leave a significant dent in the public finances as the windfall tax is only likely to raise around £7billion.  

Mr Sunak and the Prime Minister finalised the support package yesterday amid the fallout from the Partygate report.

He told MPs that he was following in the footsteps of previous Tory government - including Margaret Thatcher's - by bringing in a windfall tax.

'Like previous governments, including Conservative ones, we will introduce a temporary targeted energy profits levy, but we have built into the new levy… a new investment allowance similar to the super-deduction that means companies will have a new and significant incentive to reinvest their profits,' he said.

'The new levy will be charged on profits of oil and gas companies at a rate of 25 per cent.

'It will be temporary and when oil and gas prices return to historically more normal levels the levy will be phased out.'

He said the move was necessary 'so that we can help families with the cost of living' while avoiding hiking the 'debt burden further'.

For people on the lowest incomes, Mr Sunak said: 'Over eight million households already have income low enough for the state to be supporting their cost of living through the welfare system.'

He added: 'Right now they face incredibly difficult choices so I can announce today we will send directly to around eight million of the lowest income households a one-off cost-of-living payment of £650, support worth over £5billion to give vulnerable people certainty that we are standing by them at this challenging time.

'DWP will make the payment in two lump sums, the first from July, the second in autumn, with payments from HMRC for those on tax credits following shortly after.'

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

Referring to the previous commitment to provide all households with £200 off their energy bills from October, with the cost repaid over five years, he said: 'Since then the outlook for energy prices has changed, I've heard people's concerns over the impact of these repayments on future bills, so I've decided that those repayments will be cancelled.'

He added: 'This support is now unambiguously a grant... the £200 of support for household energy bills will be doubled to £400 for everyone.'

IFS director Paul Johnson tweeted: 'Big, expensive package from Rishi Sunak.

'In conjunction with tax rises already in place this is hugely redistributive – taking from high earners and giving to the poor.

'Promise to increase benefits and pensions by September inflation next April. Likely to be 10 per cent or more. As expected. Big cash increase in spending.'

But he added: '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.'

The Treasury pointed to £22billion of cost-of-living support announced previously, including February's energy bills intervention, with council tax rebates.

The Spring Statement also heralded a £330 tax cut for millions of workers through the NICs threshold increase from July and a 5p cut to fuel duty. 

But shadow chancellor Rachel Reeves goaded Mr Sunak over his volte face on the windfall tax, saying he was desperate for a 'new headline' after Partygate.

'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 said.

'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.'

Mr Sunak had planned to wait until July to unveil the package, when Ofgem will be able to give a more precise estimate of the likely rise in the price cap in October.

But, in a highly unusual move, the energy regulator's boss this week revealed he was writing to the Chancellor immediately to say the cap is likely to rise to £2,800.

Mr Brearley said that although the figures were 'uncertain', the situation has deteriorated and the expectation for the new level was £2,800 for a typical family - compared to £1,972 at the moment. Before April it was just £1,277.

He also admitted that there is a risk prices could go even higher if there is more disruption from the standoff with Russia. 

Furious Tories accuse Sunak of 'throwing red meat to socialists' with £5bn windfall tax on oil and gas firm profits 

Furious Tories accused Rishi Sunak of 'throwing red meat to socialists' and risking investment after he U-turned to impose a windfall tax on surging oil and gas firm profits. 

In a statement to MPs, the Chancellor said he is following in the footsteps of previous Conservative governments - including Margaret Thatcher's - with the levy.

The profits of companies such as BP will be subject to a 25 per cent charge to raise around £5billion a year, and the policy will potentially stay in place until December 2025 - longer than expected. 

Mr Sunak said the move was necessary 'so that we can help families with the cost of living' while avoiding hiking the 'debt burden further'. 

But he came under heavy fire from his own side in the Commons, with the tax branded 'not the Conservative way'.

Meanwhile, Labour goaded that he had been forced into copying a policy that it has been demanding for months.

Energy bills to be subsidised by £400 for 27million households  

Rishi Sunak today moved to take the edge off the misery of spiking inflation by cutting £400 of energy bills for 27million households.  

The £200 per household state loan for energy bills - which was due to take effect in October and be paid back over the next four years - is being converted to a permanent grant and doubled. 

Mr Sunak said: 'We are meeting our responsibility to provide the most help to those on the lowest incomes. I believe that is fair and I'm confident the House will agree.

'But there are many other families who do not require state support in normal times, they are also facing challenging times. Is it fair to leave them unsupported? The answer must surely be no.

'While it is impossible for the Government to solve every problem we can and will ease the burden as we help the entire crisis through the worst of this crisis.'

Referring to previous plans to provide all households with £200 off their energy bills from October, with the cost repaid over five years, he said: 'Since then the outlook for energy prices has changed, I've heard people's concerns over the impact of these repayments on future bills, so I've decided that those repayments will be cancelled.'

'This support is now unambiguously a grant,' he said, adding 'the £200 of support for household energy bills will be doubled to £400 for everyone'.

Rishi's £8billion 'Robin Hood' pensions and benefits handout for millions 

Rishi Sunak was likened to Robin Hood today as he poured money into the pockets of Britain's poor and elderly struggling with the cost-of-living crisis. 

Unveiling a £15billion package centred on a windfall tax on energy giants the Chancellor revealed two payments totalling £650 for more than eight million families on benefits, worth £5.4billion.

Additionally he announced a £300 payment to pensioner households worth £2.5billion, and a £150 payment to people on disability benefits.

But he also made long-term commitments to increase both universal credit and pensions in line with soaring inflation, which is expected to hit 10 per cent this year.

Mr Sunak told MPs that, subject to a review by the Work and Pensions Secretary Therese Coffey,  benefits will be uprated by this September's Consumer Prices Index (CPI) rate, noting: 'On current forecasts it's likely to be significantly higher than the forecast inflation rate for next year'.

He also confirmed a similar increase in the state pension, with the 'triple lock' remaining in place.

After the announcement in the Commons, IFS director Paul Johnson tweeted: 'In conjunction with tax rises already in place this is hugely redistributive - taking from high earners and giving to the poor.'

What Rishi's £15bn cost-of-living giveaway means for YOU 

Millions of Britain's households will receive a £400 discount off their energy bills and a £5billion tax will be levied on oil and gas giants as Rishi Sunak today moved to counter the soaring cost of living.

The Chancellor unveiled emergency measures as part of a £15billion package to tackle the impact of soaring inflation. As well as the universal payment there was targeted support for the poorest, elderly and disabled.

The £400 in universal support from October replaces the initial plan for a £200 loan, with Mr Sunak scrapping the requirement to repay the money as he acknowledged that high inflation is causing 'acute distress'.

Other measures announced include a one-off £650 payment to more than eight million low-income households on benefits; a £300 payment to pensioner households; and £150 to individuals receiving disability benefits.

The package would mean that almost all of the eight million most vulnerable households would receive at least £1,200 of support, including a £150 council tax rebate which has already been announced. A further £500 million will be allocated to the fund administered by councils to help households facing extra hardship.

Here, MailOnline looks at what Mr Sunak's new plan means for you - and by how much you could benefit:

£400 FOR EVERYONE

Energy Bills Support Scheme

Who qualifies? 

All households will now get £400 of support with their energy bills through the 'Energy Bills Support Scheme'. This replaces the initial plan for a £200 loan, with Rishi Sunak also scrapping the requirement to repay the money.

How will it be paid?

The support will come via energy suppliers to households in England, Scotland and Wales with a domestic electricity meter over six months from October. There will also be 'equivalent support' in Northern Ireland.

Direct debit and credit customers will have the money credited to their account, while customers with pre-payment meters will have the money applied to their meter or paid via a voucher. 

The Government said that this support was in addition to the £150 council tax rebate for households in England in council tax bands A to D, which was announced by Mr Sunak in February.

£650 FOR THE VULNERABLE

Cost of Living Payment 

Who qualifies? 

The Government said that more than eight million households on means tested benefits will receive a payment of £650 this year, made in two instalments.

This includes all households receiving universal credit; income-based jobseekers allowance; income-related employment and support allowance; income support; working tax credit; child tax credit; and pension credit.

How will it be paid? 

The Department for Work and Pensions (DWP) will make the payment in two lump sums – the first from July, the second in the autumn. Payments from HM Revenue and Customs (HMRC) for those on tax credits only will 'follow shortly after each to avoid duplicate payments'.

The Government said claimants will need to be in receipt of one of these benefits, or have begun a claim which is later successful, as of yesterday - May 25, 2022 - to be eligible for the first of the two instalments.

It added that HMRC and DWP will provide further guidance, and the Government would set out the eligibility date for the second instalment, in due course.

This payment will be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards. The Government will make these payments directly to households across the UK.

£300 FOR PENSIONERS

Pensioner Cost of Living Payment

Who qualifies?

Pensioner households will receive an extra £300 this year under the 'Pensioner Cost of Living Payment' to help them cover the rising cost of energy this winter.

This additional one-off payment will go to more than eight million pensioner households across the UK who receive the Winter Fuel Payment - which currently pays out between £200 and £300 to eligible people.

The cash will also be paid on top of any other one-off support a pensioner household is entitled to, such as where they are on pension credit or receive disability benefits. 

The Winter Fuel Payment and the Pensioner Cost of Living Payment are both not taxable and do not affect eligibility for other benefits.

How will it be paid? 

All pensioner households will get the one-off Pensioner Cost of Living Payment as a top-up to their annual Winter Fuel Payment in November or December. For most pensioner households, this will be paid by direct debit.

People will be eligible for this payment if they are over State Pension age (aged 66 or above) between September 19 and 25 this year. The Government will make these payments directly to households across the UK.

However, there are certain circumstances where an individual above State Pension age does not qualify for the Winter Fuel Payment which can be found here on the Government website.

£150 FOR THE DISABLED

Disability Cost of Living Payment 

Who qualifies?

Around six million people across the UK who receive a disability benefit will receive a one-off payment of £150 in September.

The benefits required to claim the payment are: the Disability Living Allowance; Personal Independence Payment; Attendance Allowance; Scottish Disability Benefits; Armed Forces Independence Payment; Constant Attendance Allowance; or the War Pension Mobility Supplement.

The Government said this payment was in response to the fact that people with disabilities 'may face a wide range of additional costs, such as specialist equipment, specialist food, and increased transport costs, and this payment will help with these costs as they are likely to have increased'.

The guidance states that claimants must be in receipt of, or have begun an eventually successful claim for, one of these benefits as of yesterday - May 25, 2022 - to be eligible for this additional payment.

How will it be paid? 

For the disability benefit recipients who receive means tested benefits, this £150 will come in September on top of the £650 they will receive separately.

These payments will be exempt from tax, will not count towards the benefit cap, and will not have any impact on existing benefit awards. The Government will make these payments directly to eligible people across the UK. 

EXTRA £500MILLION FOR COUNCILS

Household Support Fund

The Government is providing an extra £500 million of local support, via the Household Support Fund, which will be extended from this October to March 2023.

This is intended to help those in most need with payments towards the rising cost of food, energy, and water bills. It will bring the total amount provided through the Household Support Fund to £1.5billion since last October.

The Government is set to issue guidance to councils to ensure support is targeted towards those most in need of support, including those not eligible for the Cost of Living Payments set out today.

The Household Support Fund is administered by local councils in England and the Government said that further information will be available directly from them. Eligibility will be determined by individual councils.


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