Posted: Thu 26th May 2022

Chancellor announces £15 billion package of targeted support to help with rising cost of living

News and Info from Deeside, Flintshire, North Wales
This article is old - Published: Thursday, May 26th, 2022

£15 billion package of targeted government support to help with the rising cost of living has been announced by the Chancellor.

The UK Government say the new support package is targeted towards millions of low-income households and brings the total cost of living support to £37 billion this year.

It means that almost all of the eight million most vulnerable households across the UK will receive support of at least £1,200 this year, including a new one-off £650 cost of living payment – in his statement noting that such payments should be automatic and would not require forms to be filled in.

Chancellor Rishi Sunak also announced that the energy bills discount due to come in from October is being doubled from £200 to £400, while the requirement to pay it back will be scrapped.

This means households should receive a £400 discount on their energy bills from October.

Mr Sunak also announced a £500 million increase for the Household Support Fund, delivered by Local Authorities, extending it from October until March 2023. This brings the total Household Support Fund to £1.5 billion.

Under the Barnett formula Wales will receive £25 million as a consequential.

To help pay for the extra support – which takes the total direct government cost of living support to £37 billion – the Chancellor said a new “temporary 25% Energy Profits Levy” would be introduced for oil and gas companies, reflecting their extraordinary profits – something more commonly known as a windfall tax, a phrase not used in the Commons statement.

The new Levy is expected to raise around £5 billion in its first 12 months, with the statement noting it will be temporary, and if oil and gas prices return to historically more normal levels, will be phased out.

Today’s announcements comes after a warning that energy prices could rise further this autumn.

The Chancellor of the Exchequer Rishi Sunak said: “We know that people are facing challenges with the cost of living and that is why today I’m stepping in with further support to help with rising energy bills.

“We have a collective responsibility to help those who are paying the highest price for the high inflation we face. That is why I’m targeting this significant support to millions of the most vulnerable people in our society.

“I said we would stand by people and that is what this support does today.

“It is also right that those companies making extraordinary profits on the back of record global oil and gas prices contribute towards this. That is why I’m introducing a temporary Energy Profits Levy to help pay for this unprecedented support in a way that promotes investment.”

In the Commons Labour Shadow Chancellor Rachel Reeves kicked off her response by claiming the ideas as theirs, “Let there be no doubt about who is winning the battle of ideas in Britain, it is the Labour party” while criticising the “Dither and delay” and implementing the policies.

Wider reaction to the statement includes the Welsh Liberal Democrat Leader Jane Dodds who said: “The Chancellor is hammering families with a £800 tax hike this year, more than wiping out what he announced today.

“It is the Sunak scam, promising you help but picking your pockets while you’re not looking.

“Soaring inflation and devastating tax rises have left families who never dreamed they would find themselves in trouble struggling to pay the bills. Wales’s already high poverty rates look likely to skyrocket.

“Welsh people need help right now, but instead have been left abandoned again for months on end. Whilst the Chancellor refused to take any action over the last few months inflation in countries like France was kept at 4.8% thanks to Government action whilst the UKs has increased to over 9% or 14% for the poorest households.

“Rishi Sunak needs to scrap his unfair national insurance tax hikes and cut VAT. That would put money now back into people’s pockets and boost the Welsh economy.”

 

 

Top pic: Archive image of the Chancellor in the Commons.

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