The Chancellor has today announced further support to help with the rising cost of living. With the unprecedented economic impact of the pandemic, coupled with a series from global forces - from the reopening of economies following the pandemic, Russia’s invasion of Ukraine, and a fresh wave of lockdowns in China – families and businesses are being affected by a significant rise in inflation and everyday prices.
While any Government cannot solve every problem – the Chancellor has today set out a package to help millions of families struggling with the cost of living. To help fund this, we will be raising extra revenues through a new Energy Profits Levy, which will be charged on the profits of oil and gas companies at a rate of 25 per cent, on top of the existing Corporation Tax. This will be temporary, and when oil and gas prices return to a more normal price, the Levy will be automatically phased out. This will raise around £5 billion over the next twelve months.
£9 billion of targeted support to the most vulnerable households, including pensioners. This includes:
- £650 cost of living payment for every household on means-tested benefits. 8 million of the most vulnerable households will directly be sent a one-off cash payment of £650. This will be paid in two instalments, with the first due in July and he second in the Autumn.
- £300 pensioner cost of living payment – this is for every pensioner household in receipt of Winter Fuel Payment. Due to be paid out automatically in November or December.
- £150 disability cost of living payment for those in receipt of disability benefits. One off cash payment to be paid out in September.
- £500 million fund to help hard cases. This is an additional £500 million for the existing Household Fund from October, to ensure that local councils can support those not covered by the above set of payments.
Hard working families will also be supported with £6 billion to help with energy bills:
- The £200 October rebate will be doubled to £400 – and will be turned into a cash grant by removing the phased clawback mechanism announced in February. This means we are not only supporting those on lowest incomes, but also hardworking ordinary families. This will continue to be delivered by energy suppliers from October, with payments spread over six months.
This is in addition to other cost of living measures already announced such as £150 cash rebate for homes in Council Tax Bands A-D, cutting fuel duty by 5p for 12 months, and raising the National Insurance personal threshold from £9,500 to £12,570. We have also previously cut tax for low income families by reducing the Universal Credit taper rate, as well as many other measures.
This provides an excellent set of measures to help out hard working families with the increased costs of living.
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