Sunak denies using £21bn support package to hijack 10 lockdown parties

Rishi Sunak has insisted he hasn’t had time to hand out £21billion in cost-of-living aid to distract from the Downing Street lockdown party controversy. The Chancellor gave in to demands from the UK government to step in and help households cope with soaring energy bills and rising shop prices, which have been fueled by high inflation for 40 years, by revealing an emergency package of extra money for millions of people.

Each household will get a £400 cut on their energy bill, while additional support has also been unveiled for the lowest earners, pensioners and people with disabilities. Under the plans, almost all of the eight million most vulnerable households could receive at least £1,200 in aid, including a previously announced £150 council tax refund.

Mr Sunak faced criticism that the measures had been announced as part of a plan to shift the focus to the rule-breaking in No 10 following the publication of the report on Wednesday senior civil servant Sue Gray. The report contained a photograph of Mr Sunak attending Boris Johnson’s surprise birthday party in the Cabinet Room in June 2020, for which the Chancellor and Prime Minister were both fined £50 by the metropolitan police.

In an interview with Martin Lewis, founder of the Money Saving Expert website, the Chancellor was asked if the tax measures were quickly unveiled to act as a ‘fig leaf’ after embarrassing details of rowdy end-of-season parties evening in Downing Street were posed. naked. He replied, “I can categorically assure you that it had no bearing on when we announced this support, and I can give you my absolute assurance on this and my word.

“The reason we acted today was because we had more certainty about what will happen to energy prices in the fall.” Industry regulator Ofgem said this week that the typical annual household energy bill is set to rise by more than £800 in October when the price cap rises, having already risen by more than 50% in April.

The measures announced by the Chancellor in the Commons included a one-time payment of £650 to low-income households on benefits, paid in two installments in July and the autumn at a cost of £5.4billion. Pensioners will also receive a £300 payment in November/December alongside winter fuel payments in a move costing £2.5billion, while £150 will be paid out by September to those receiving disability benefits .

Mr Sunak announced that £5bn of the package would be paid for by a takedown of oil and gas giants’ profits, and around £10bn would be covered by additional borrowing. The Chancellor tried to avoid calling his 25 per cent energy profit levy plan a ‘windfall profit tax’ as he was accused by Labor of being ‘kicked and kicked’ cries” in a U-turn on the policy the opposition has spent months calling for.

But Simon Clarke, Chief Secretary to the Treasury, acknowledged it was an exceptional tax, although one he said included a ‘carefully calibrated bid’ because of its tax incentives for companies to invest in the production of oil and gas in the North Sea. Tory MPs including Richard Drax have publicly voiced concerns about the windfall tax in the House of Commons, suggesting it amounts to ‘throwing red meat at socialists’.

Mr Clarke, however, defended his boss’ approach, pointing out where windfall taxes had been used in the past by Tory administrations, including former Chancellor George Osborne and ex-Prime Minister Margaret Thatcher. He told BBC Radio 4’s PM programme: ‘The fact is when you start it you have to be very careful that it doesn’t have ill effects and ill consequences as a result, and that’s something thing we did.”

The Times and Telegraph reported that Jacob Rees-Mogg, Minister for Brexit Opportunities and Government Effectiveness, warned at Thursday’s Cabinet meeting that the tax could hurt investment. Mr Rees-Mogg later told Sky News that any taxation had an ‘economic consequence’.

He said: “Whether it is a pasty tax or an excess profit tax, there is an economic consequence. There is no free tax honeypot that governments can just step into.

When announcing his tax package in the Commons, Mr Sunak told MPs it was worth £15billion. But officials later acknowledged the announcement had a hidden cost of £6billion, bringing it to £21billion.

Indeed, over the next five years, the original £200 rebate on energy bills, announced in February and doubled and turned into a grant by the Chancellor on Thursday, will no longer be repaid by consumers as originally planned.

Source link

About Chris Y. Camp

Check Also

Park Hyatt Busan Unveils Sweet Romance Package

The Park Hyatt Busan presents “Sweet …