A DORSET MP has blasted the Chancellor for announcing a new tax in his emergency measures to tackle the soaring cost of living.
South Dorset MP Richard Drax today criticized the Government for overturning its opposition to a windfall tax on oil and gas companies, announcing it would introduce a levy to tackle rising bills.
Chancellor Rishi Sunak today announced that millions of households will get a £400 rebate on their energy bills and a £5billion tax will be levied on oil and gas giants.
The idea of a windfall tax had met with resistance in government, with Mr Sunak himself among ministers to warn of the impact it would have on the future investment.
But the chancellor said his proposed 25% energy profit levy would be combined with a new incentive, nearly doubling the tax relief available on investment.
Mr Sunak stopped short of also hitting the new tax on electricity generators, although he said the Treasury was assessing the scale of the profits made in the industry and what action could be taken.
Consumer price index inflation hit 9% in April and consumers are bracing for the energy price cap to rise by over £800 to £2,800 in October as the pressure on the standard of living continues.
The Chancellor told MPs: ‘The high inflation we are currently experiencing is causing acute distress to the people of this country.
Tory MP Richard Drax told the Commons: ‘May I warn (Rishi Sunak) that throwing red meat at socialists by raising corporate taxes and telling them where to invest their money is not the Conservative way to encourage those who create our prosperity and jobs to do just that.
“And does he agree with me that by setting that bar we risk – if ever we were to lose power – allowing the socialists to raise it, which they would happily do, again and again and again. “
The Chancellor replied: ‘I believe that a pragmatic and compassionate Conservative government would act to provide support to the most vulnerable in times of acute need, and a fiscally responsible government would seek to try to fund as much as possible in as fair a way as possible. . »
Mr Sunak was forced to unveil emergency measures as part of a £15billion package to tackle the impact of soaring inflation, which has hit a 40-year high.
In addition to the universal payment, there was targeted support for the poorest, the elderly and the disabled.
The Chancellor acknowledged that high inflation was causing “acute distress” to people across the country, telling MPs: “I know they are worried, I know people are struggling”.
He said the government ‘will not sit idly by while there is a risk that some in our country are so far gone that they will never recover’.
£6bn announcement of £400 universal support from October replaces original £200 plan readyMr. Sunak removing the obligation to refund the money.
Other measures announced by the Chancellor include: a one-time payment of £650 to more than eight million low-income households on benefits, paid in two installments in July and the autumn at a cost of £5.4billion pounds sterling; a £300 payment to pensioner households in November/December alongside the winter fuel payment, costing £2.5 billion; and £150 to people receiving disability benefits, worth a total of £0.9billion, paid out by September.
The plans will be funded by around £10billion in additional borrowing, but Mr Sunak insisted he had a ‘responsible fiscal policy’.
The package would mean nearly all of the eight million most vulnerable households would receive at least £1,200 in aid, including a previously announced £150 council tax rebate.
A further £500million will be allocated to the council-administered fund to help households facing additional hardship.
The Chancellor stressed the need to keep public finances under control and explained how a tax on oil and gas companies – which have benefited from high global prices driven by post-pandemic demand and the war in Ukraine – would raise around £5 billion to help defray costs.