UK hits oil and gas companies with $6 billion windfall tax
“The oil and gas sector is making extraordinary profits, not as the result of recent changes, risk-taking or innovation or efficiency, but as the result of surging global commodity prices,” Sunak said in a speech to parliament.
The tax will help fund a new package of benefits worth about £15 billion ($19 billion). Sunak said the government would make one-off direct payments to millions of the country’s most vulnerable households. Around eight million low-income households will receive £650 in two installments later this year, while a further eight million pensioners will receive £300.
Rocketing energy bills have fueled price rises across the economy. In April, UK consumer price inflation hit 9% — its highest level in 40 years. And as wages have failed to keep pace with rising food and fuel costs, living standards have fallen back to their lowest level since the 1950s, according to the UK’s Office for Budget Responsibility.
In February, Sunak provided some relief, offering households £200 off their energy bills from October, which was due to be repaid in installments over the next few years. On Thursday, Sunak doubled the discount and said nothing would need to be paid back.
“This support is now unambiguously a grant,” he said.
Poverty campaigners welcomed Thursday’s measures.
“The Chancellor has clearly listened to concerns that support for those in fuel poverty needs to be both widespread, but also focused on the most vulnerable groups,” Simon Francis, coordinator for the End Fuel Poverty Coalition, told CNN Business.
Francis added that while the new measures would “take the sting out of the tail” of recent energy price hikes, people in fuel poverty needed more reassurance that support will be available in the medium term.
— Mark Thompson contributed reporting.
