What UK minister Rishi Sunak proposed for ‘struggling families’ amid high inflation
As part of a GBP 15 billion Cost of Living Support package, he pushed for one-off payments for struggling families and a temporary levy on high profits of oil and gas companies.
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FollowUK minister Rishi Sunak, who is also the son-in-law of Infosys founder Narayan Murthy, on Thursday proposed a series of measures to deal with soaring inflation in Britain. As part of a GBP 15 billion Cost of Living Support package, he pushed for one-off payments for struggling families and a temporary levy on high profits of oil and gas companies.
The Opposition has also questioned the timing of the announcement, claiming that the move has been timed to change the headlines away from the partygate scandal, after a damning inquiry report had concluded leadership failures at the very top of government with lockdown-breaching parties in Downing Street.
The Indian-origin UK finance minister, who has been facing criticism over the inflation, was long expected to come up with a plan to deal with the country’s highest inflation rate in decades.
I know people are worried about bills, said the UK minister at the House of Commons, adding that the government "will not sit idly by" and has the tools to combat inflation over time.
Helping those paying the highest price for the high inflation was a 'collective responsibility', he said, adding that 'this 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.'
What are the proposed steps?
A new, one-off GBP 650 payment will be offered to more than 8 million low-income households on Universal Credit Tax Credits, Pension Credit and other benefits, with separate one-off payments of GBP 300 to pensioner households and GBP 150 to individuals receiving disability benefits.
Sunak had already confirmed an energy bill discount due to come in from October. Adding to that he announced a doubling of that discount from GBP 200 to GBP 400. For ease of repayment, he scrapped the requirement to pay it back over time. This effectively means low-income households will receive a GBP 400 discount on their energy bills from October to address the impact of a particularly sharp rise in global fuel prices.
Cost of Living Support package in absolute numbers
The finance ministry has claimed that the support package will ensure at least GBP 1,200 of extra support this year to almost all of the 8 million most vulnerable households in the country.
Pointing out that the oil and gas sector is making 'extraordinary profits', Sunak said that for the extra support a new temporary 25 per cent Energy Profits Levy would be introduced for oil and gas companies.
But in order to increase the incentive to invest, the new levy will include a new 80 per cent investment allowance. The levy will be charged on profits at a rate of 25 per cent and will eventually be phased out.
"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, said Sunak.
In the announcements by the finance minister today, the Opposition Labour Party said it was enforcing its idea under a different form. The opposition was demanding such an intervention on the high profits of the energy giants in the form of a "windfall tax".
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