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Rishi Sunak’s spending plans at a glance: a windfall tax and a universal grant

·2-min read

Chancellor Rishi Sunak has returned to the Commons to unveil a new £15 billion emergency package of measures to support households through the cost-of-living crisis.

Just two months after his last set-piece spending announcement, he announced a U-turn to hit oil and gas giants with a windfall tax to fund a raft of new measures.

With targeted support to those who need it most and a grant to ease energy bills for all households, here is a quick look at the details.

– Windfall

Though Mr Sunak did not use the word “windfall”, having spent months opposing the move, he did announce an “energy profits levy” to raise around £5 billion in a year.

The temporary tax will hit oil and gas firms by 25% on extraordinary profits, which have surged because of the invasion of Ukraine and the coronavirus pandemic.

An 80% investment allowance was also announced in order to calm Conservative nerves that the move will dent North Sea firms’ investment, to save them 91p for every £1 they spend.

But it will not necessarily be a one-off, with the Treasury saying it will be “phased out” as “prices return to historically more normal levels”.

– A universal grant

The Chancellor acknowledged the situation has worsened since he announced the energy bills discount, which was effectively a £200 loan.

Windfall tax warning
Oil and gas firms have voiced opposition to a windfall tax (Jane Barlow/PA)

He has doubled it to a £400 discount on bills for all households from October, and has now genuinely made it a grant that will not need to be paid back.

The Treasury priced the measure at £6 billion, with officials expecting the £10 billion gap between the windfall tax and the spending to be raised through borrowing.

– Targeted measures

Worth £5.4 billion, more than eight million of the lowest income households will receive a £650 one-off payment. It will apply to households on Universal Credit, Tax Credits, Pension Credit and legacy benefits.

Additional one-off payments of £300 will go to pensioners alongside the winter fuel payment this winter, at a cost of £2.5 billion.

Worth £900 million, those receiving disability benefits will receive a £150 cost of living payment by September

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