Chancellor Rishi Sunak announced a raft of emergency measures today as part of a £15 billion package to tackle the soaring cost of living.
The package aims to reduce the impact of soaring inflation, which has reached a 40-year high, with Mr Sunk acknowledging that it is causing “acute distress” for people across the UK.
He told MPs that the government “will not sit idly by” while costs continue to rise and said he knows that “people are struggling”.
What measures did Rishi Sunak announce?
A new £15 billion package of measures will help to support households through the cost of living crisis.
Listed are the spending plans announced by Mr Sunak in the Commons.
£400 discount off energy bills
Millions of households will receive a £400 discount off their energy bills as part of the support package.
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.
He acknowledged the situation has worsened since he announced the energy bills discount, which was effectively a £200 loan, saying the payment is "now unambiguously a grant".
One-off £650 payment to low income households
A one-off £650 payment will be made to more than eight million low-income households on benefits.
It will apply to households on Universal Credit, Tax Credits, Pension Credit and legacy benefits.
£300 payment to pensioner households
More than eight million pensioner households that receive the winter fuel payment will receive an extra one-off £300 cost of living payment from autumn.
£150 to people receiving disability benefits
People who receive disability benefits will receive a one-ff £150 payment from September.
Mr Sunak said: “To help the six million people who receive non-means tested disability benefits, we will send them, from September, an extra one off disability cost of living payment worth £150.”
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.
Mr Sunak announced 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.
He said: “The new levy will be charged on profits of oil and gas companies at a rate of 25%.
“It will be temporary and when oil and gas prices return to historically more normal levels the levy will be phased out.”
An 80% investment allowance was also announced in order to calm Tory nerves that the move will dent North Sea firms’ investment to save them 91p for every £1 they spend.
The idea of a windfall tax had faced resistance in government, with Mr Sunak among the ministers to warn about the impact it would have on future investment.
However, the Chancellor said his plan for a 25% energy profits levy would be coupled with a new incentive, almost doubling the tax relief available on investment.
Shadow chancellor Rachel Reeves said Labour had been calling for a windfall tax since January and Mr Sunak had been dragged “kicking and screaming” into a U-turn.
She said: “It feels like the Chancellor has finally realised the problems the country are facing.”