Rishi Sunak announces windfall tax on oil and gas companies and £650 grant for low-income families – UK politics live | Politics

In an interview with Sky News Lucy Frazer, a Treasury minister, has just confirmed that the government will have to raise borrowing to fund the package announced by Rishi Sunak today. Although he is introducing a windfall tax on energy companies, that is only expected to raise £5bn of the £15bn needed.

Asked how the government could afford to cut taxes if it was also having to borrow more, Frazer said the key thing was to promote growth.

Back to the £15bn cost of living support package, and here is some reaction to Rishi Sunak’s announcement from welfare organisations.

From Paul Kissack, chief executive of the Joseph Rowntree Foundation, the poverty charity

For people living with worry and fear through this cost of living crisis, and especially for those going without essentials, today’s statement will offer very welcome relief. It is right to target help at those on low incomes, who are least able to bear the shock of soaring energy bills.

We are pleased by the commitment to uprate benefits in line with inflation as usual, though it is still crucial that the government invests on an ongoing basis in ensuring that everyone can get through difficult times and afford the essentials.

From Sam Nadel, head of government relations at Oxfam

About time! It’s right that fossil fuel companies making excess profits are being asked to contribute more at a time when so many families in the UK have run out of options and can’t afford to pay the bills, with little left to cut back on.

From Dan Paskins, Director of UK impact at Save the Children

Today’s announcement is welcome and will provide much needed breathing space to many families struggling with the cost of living. It’s a generous package, and the chancellor has clearly listened to the unacceptable conditions people have been facing.

From Vicki Nash, head of policy, campaigns and public affairs at Mind, the mental health charity

Today’s announcement by the chancellor of the xchequer of financial assistance for households across the country is welcome, though we remain concerned that people on the lowest incomes will continue to struggle.

We are pleased to see the UK Government recognising the extra costs faced every day by disabled people through a £150 grant to those claiming disability benefits, as well as the decision to give a grant of £650 to 8 million households on the lowest incomes to support with rising living costs. It is also reassuring to hear the Government committing themselves to raising all benefits in line with inflation next year.

From Azmina Siddique, policy and impact manager at the Children’s Society

The money for households announced today will undoubtedly make a positive impact and ease some of the burden for those who are being hardest hit by energy price shocks. Shockingly, when the chancellor listed the ‘most vulnerable’, children didn’t make the cut.

There was an opportunity here to provide targeted support to families with children – a third of whom were already in poverty before the cost of living crisis. Expanding free school meals to all children whose parents are on universal credit or a £10 increase to child benefit could have made a real difference.

House tells the police and crime committee that he has responded to the letter from Sadiq Khan, the London major, asking for an explanation as to why Boris Johnson received just one fine.

He says the letter sets out what he told the committee earlier – that various factors were taken into account when deciding who would be fined. It will be published on the Met’s website, he says.

And that’s all the questioning on Partygate. House is now being asked about other policing matters.

Caroline Pidgeon (Lib Dem) is asking questions now.

Q: Were there any people who refused to respond to your questionnaires?

House says that the “vast majority” of people returned their questionnaires. And he says the “vast majority” paid their fines.

If people did not return a questionnaire, that did not stop the Met investigating them, he says.

Acting Met commissioner says is confident that Johnson was not tipped off weeks ago by police that he would get just one fine

The TUC has described today’s announcement from Rishi Sunak as “badly needed”, but criticised the government for not having a long-term plan to raise living standards. In a statement, Frances O’Grady, the TUC general secretary, said:

The chancellor should have acted far sooner after his inadequate spring statement. His dither and delay has caused unnecessary hardship and worry for millions. While today’s intervention is badly needed, we should have never been here in the first place …

With energy bills rising 23 times faster than wages we urgently need to get pay packets rising and to pay universal credit at a permanently higher rate – not just a one-off boost. That’s the best way to protect livelihoods and to support the economy.

In his statement Rishi Sunak stressed that his windfall tax would be temporary. But the CBI is criticising it on the grounds that it could be open-ended. (See 1.50pm)

How can they both be right? In his briefing note, the Treasury says that although the intention is for the tax to be temporary, it could last three and a half years.

The energy profits levy will apply to profits arising on or after 26 May 2022. Companies who have an accounting period that straddles that date will be required to apportion their profits. It is temporary and will be phased out when oil and gas prices return to historically more normal levels. The legislation will also include a sunset clause, which will remove the tax after 31 December 2025.

Sunak’s windfall tax ‘will be damaging to investment’, CBI says

In the Commons Alun Cairns has just highlighted the response to Sunak’s statement from Martin Lewis, the consumer champion who set up the MoneySavingExpert website. It’s here. In his video Lewis says it is “quite a good package” and probably better than he expected.

Lewis, who spoke to Sunak on Monday and who is doing an online Q&A with him later this afternoon, says Sunak has addressed many of the points he raised with him.

Some of the earlier posts have been beefed up with direct quotes from Rishi Sunak and Rachel Reeves’s speeches. You may need to refresh the page to get those to appear.

Back in the Commons Peter Aldous (Con) says he welcomes the measures, but says Rishi Sunak will need to keep the situation under review and consider the case for “further measures”, such as a social tariff and special help for people on pre-payment meters.

This is from Paul Johnson, of the Institute for Fiscal Studies, on the difference between Rishi Sunak’s windfall tax, or “temporary, targeted energy profits levy”, and Labour’s version.

These are from John McDonnell, the former shadow chancellor, on Sunak’s announcement.

These are from Simon Evans, from Carbon Brief, who says the tax relief announced by Rishi Sunak today will incentive energy companies to invest in oil and gas extraction.

These charts show how much of the help announced today is going to poorer and richer households. They are from the Treasury’s distributional analysis.

As a proportion of household income, the poorest 10% of households gain almost seven times as much as the average household.

In cash terms, the measures are not quite so progressive, but they still see the poorest 10% of households gaining more than double what the richest 40% of households are getting.

Back in the Commons David Duguid, a Scottish Conservative MP, says he was opposed to Labour’s plans for a windfall tax because they were too “punitive”. He says he welcomes the fact that this approach to excess profits is more targeted.

Here is the text of Rishi Sunak’s statement.

And here are the background Treasury papers published alongside the main press announcement.