Sunday Times Rich List: Rishi Sunak and wife join the elite with a fortune of £730 million
In a major about-turn, Rishi Sunak has announced that he will impose a storm tax on oil and gas companies’ profits to fund measures to help people struggling with the cost of living crisis.
Following criticism of inaction in the face of skyrocketing prices, the Chancellor on Thursday unveiled a £15 billion plan, including a £650 payment for eight million of the most disadvantaged households, a one-off payment of £300 to eight million pensioner households and £150 each for six million disabled people.
Mr Sunak also scrapped his £200 energy bill loan and replaced it instead with a £400 subsidy available to all households. He said tax cuts for innovation would ensure the unexpected tax did not reduce investment in green power.
Shadow Chancellor Rachel Reeves said Sunak’s announcement showed the Labour Party “won the battle of ideas”, adding: “This government’s dither and delay is costing the country dearly.”
As he began his statement to MPs, Sunak was covered with cries of “what took you so long” and “about time”.
Stormfall taxes in place until prices hit a more normal level, Sunak says
The stormfall tax will be in place until “prices return to a more normal level”, Rishi Sunak has said.
Mr Sunak told Commons: “We will put a backstop sunset clause in the legislation with the energy surplus tax. It will remain in place until prices return to a more normal level.”
Andy Gregory26 May 2022 14:18
Conservative MP warns Sunak against ‘throwing red meat to socialists’
A Conservative MP has warned Rishi Sunak against “throwing red meat to socialists by raising taxes on businesses and telling them where to invest their money”, warning that this is “not the conservative way to encourage those who create our wealth and jobs to do just that”.
Richard Drax asked the Chancellor if he agreed that “by setting this bar, we are in danger – if we ever lose power – of allowing the Socialists to raise it, which they would do with pleasure, over and over and over again”.
Sunak said he believed a “pragmatic and compassionate Conservative government would act to provide support to the most vulnerable in a time of acute need, and a fiscally responsible government would seek to try to fund as much of it as possible in as fair a manner as possible”.
Earlier, the Chancellor had said the government’s support measures for the cost of living were “more generous” than those called for by Labour.
Andy Gregory26 May 2022 14:15
Conservative MP quizzes Sunak on why Japan and Switzerland have escaped inflation surge
Conservative former minister Sir Desmond Swayne has asked Rishi Sunak what “difference in monetary policy has protected Japan and Switzerland from inflation levels” in Britain, the US and the rest of Europe.
The Chancellor replied: “Japan, which he will appreciate, is a very special case, but even there they are experiencing their highest inflation relative to many, many years.
“As for Switzerland, the reason is a couple of things. One is a strong, particularly strong Swiss franc, which happens in times like this, but also a completely different mix of energy, which I think is overwhelmingly supplied by hydro-nuclear power from memory, but it’s a completely different energy mix, which means they suffer less from the shock we’re experiencing.”
Andy Gregory26 May 2022 14:11
Stormfall tax “will hurt the investments needed for energy security and net zero”
While helping struggling households “is the right thing to do”, the unexpected tax on oil and gas companies’ profits will hamper the investment needed for the UK’s energy security and net-zero targets, the Confederation of British Industry (CBI) has warned.
The body’s chief economist, Rain Newton-Smith, said: “Helping people facing real difficulties in the midst of one of the worst cost of living in recent memory is the right thing to do.
“Despite the investment incentive, the energy surplus tax the open-ended nature – and the potential to bring electricity generation into scope – be detrimental to the investments needed for energy security and net net net 20bitions.
“It sends the wrong signal to the entire sector at the wrong time against the backdrop of rising business taxation elsewhere. The government needs to work with business on a genuine plan to increase business investment and get growth going again, especially in areas such as energy efficiency.”
Andy Gregory26 May 2022 14:08
The measures are ‘too little, too late’, says Lib Dem spokesman
Rishi Sunak’s move is “too little, too late”, a Liberal Democrats spokeswoman for the finance ministry has said.
Christine Jardine told MPs: “Finally, after months of families in this country, proud families in this country who have never needed help before, shouted for help from this Chancellor, for pensioners who sat in cold houses in the winter because they could not afford to heat them, for all these people, for those families, who wasn’t able to put food on the table, it’s come as too little, too late.”
Referring to his party’s previous calls for a storm tax, Jardine urged the chancellor to listen when ideas are proposed “that would help the people of this country instead of raising their taxes”.
Mr Sunak replied that “70 per cent of those in work will pay less tax this year than they did last year because of the changes we have made”, adding: “Now is the time to act because we have more certainty about what the price cap in the fall will be.”
Andy Gregory26 May 2022 14:04
Sunak’s ‘delayed’ announcement leaves millions of families uncertain about the future, IPPR says
Rishi Sunak is “delayed rising to cost of living challenge” but has left millions of families uncertain about the future, the Institute for Public Policy Research (IPPR) has said.
The think tank welcomed the “sensible about-face” of a stormfall tax, but said tax cuts for investment in the North Sea point in the wrong direction – and warned that the benefit promise should be permanently “baked in” so that millions of households do not face repeated uncertainty.
Rachel Statham, the IPPR’s associate director of work and the welfare state, said Sunak had needed to meet three tests about his measures to increase household support.
As the support went far enough to close the gap in families’ budgets, Statham said: “Yes – for now” and also pointed to a “welcome change of direction” in support of reaching out to those who need it most.
But asked whether the subsidy represented “a sticky patch or a safety net,” Statham said: “This is a living standard crisis of historic proportions — and those with the lowest incomes are most at risk. We need to see support that can keep families afloat, not just this year, but in the future.
“Today’s measures offer temporary relief, but any long-term solution must ensure that our social safety net is fit for purpose.”
Andy Gregory26 May 2022 13:59
Sunak announces ‘another missed opportunity’, says Sadiq Khan
Sadiq Khan has described Rishi Sunak’s announcement today as “another missed opportunity to prove that the Conservatives are really serious about tackling this cost of living crisis”.
London’s mayor said there was “so much more” the government could do to help people, including giving him powers to freeze private rents in London.
Andy Gregory26 May 2022 13:49
Conservative former energy minister welcomes ‘proportionate’ stormfall tax
A former energy minister and Conservative backbencher has welcomed the announcement of a stormy tax on oil and gas companies.
Chris Skidmore, MP for Kingswood and chairman of the party’s entire parliamentary group on the environment, said: “Today’s tax on oil and gas is proportional to the above-normal surpluses they are taking and the challenge faced by ordinary households.
“At the same time, investments in the green technologies of the future are protected, which is welcome.”
He added: “The government recognises that the only viable long-term plan to reduce emissions and cut bills is net zero. Going forward, we should look at a new multi-year net zero fund to help get rid of volatile gas, supporting the persistencethey energy, isolate homes and keep energy bills down permanently.
Andy Gregory26 May 2022 13:43
Measures ‘not enough’ to help the poorest in the UK, SNP says
Chancellor Rishi Sunak’s £15 billion financial support package is “not enough” to help the poorest in society, the SNP has said.
“It’s quite amusing to hear the Chancellor talk about this being ‘timely’,” SNP spokeswoman for work and pensions Kirsty Blackman told MPs.
“I mean, it’s time it just happened in the week of the Sue Gray report, it just happens that that report came out yesterday en The chancellor has suddenly realised today that people are really struggling, that he’s suddenly realised he has to announce something about it.”
Ms Blackman added: “I don’t understand why he has only announced a £15 billion package. He’s got £28 billion in fiscal space in the public sector’s net debt, he’s got £32 billion in fiscal space to balance the current budget, the OBR’s figures from March.
“Yet he refuses to spend this money now in the timely, targeted way that it is needed now for people.”
Mr Sunak said in his reply: “I know that for some people it will never be enough, but that is why the SNP’s plans would leave Scotland with, I think, a budget deficit of 20 per cent and bankrupt the country; it’s not something we’ll ever do for the people of Scotland or the United Kingdom.”
Andy Gregory26 May 2022 13:42
Conservative former minister says ‘we need to think about the tax burden in the coming years’
Conservative former cabinet minister Robert Jenrick has said “we need to think about the tax burden” in the coming years because Rishi Sunak’s announcement is “highly redistributive”.
Jenrick told MPs that the Chancellor had made “all the right assessments” about providing support to the poorest households in the face of a “period of extreme hardship”, but warned that a “steady hand” from the Bank of England was needed to “inject some confidence into the economy facing a recession or a long period of stagnation”.
He said: “We need the supply-side reforms that he is referring to as soon as possible, we need delivery on the energy plan put forward by the Chancellor and the Prime Minister and we need to think about the tax burden in the coming years because the announcement he has made today is highly redistributive.
“And that’s a good thing for hardworking families and the vulnerable, but it’s being paid for by higher taxes on higher earners and businesses, and in the long term, we need to do something about it.”
Andy Gregory26 May 2022 13:39