“The oil and gas sector is making exceptional profits not as a result of recent changes, risk-taking, innovation or efficiency, but as a result of rising global commodity prices,” Sunak said in a speech to parliament.
The tax will help fund a new package of benefits worth around 15 billion pounds ($19 billion). Sunak said the government will provide one-time direct payments to millions of the country’s most vulnerable families. About eight million low-income families will receive £650 in two payments later this year, while another eight million retirees will receive £300.
The skyrocketing energy bills led to price hikes in various sectors of the economy. In April, UK consumer price inflation hit 9% – its highest level in 40 years. As wages fail to keep pace with rising food and fuel costs, living standards have fallen to their lowest level since the 1950s, according to the UK’s Office of Budget Responsibility.
In February, Sunak . presented Some relief, as it offers families a £200 discount on their energy bills from October, which were due to be paid in installments over the next few years. On Thursday, Sunak doubled the discount and said there was no need to get anything back.
“This support is now unequivocally a grant,” he said.
Anti-poverty activists welcomed Thursday’s actions.
“The chancellor has clearly heard concerns that support for those struggling with fuel poverty should be widespread, but also focused on the most vulnerable,” Simon Francis, coordinator of the End Fuel Poverty Coalition, told CNN Business.
Francis added that while the new measures would “remove the sting” from recent energy price increases, people struggling with fuel poverty need more reassurance that support will be available in the medium term.
– Mark Thompson contributed reporting.
“Professional web geek. Alcohol fan. Devoted zombie trailblazer. Certified social media lover. Amateur creator. Friendly food nerd.”