Rishi Sunak announcement: Measures announced to help Sheffield residents with energy bills amidst cost of living crisis - following U-tun on windfall tax on energy companies

The Chancellor of the Exchequer announced new measures to support UK households with the cost of living crisis in the face of soaring energy bills today (Thursday, May 26).

Thursday, 26th May 2022, 2:22 pm

The announcement follows a day after the Sue Gray report was published, which revealed further details about Sheffield Council CEO Kate Joseph’s leaving do for her former role as Head of the Covid taskforce.

Read More

Read More
Sue Gray Report: Sheffield's Kate Josephs issues 'unequivocal apology' after det...

What support is available to me to help with energy bills?

Sign up to our daily newsletter

Chancellor Rishi Sunak has announced a new support package funded by a windfall tax on oil and gas firms. (Photo by Leon Neal/Getty Images)

The chancellor announced that all households will receive a £400 discount on energy bills.This will take the form of a grant, and will replace the previous policy of a £200 loan, which households were told they would need to pay back over a five year period.

When will I get the £400 payment to help with energy bills?

The previous support package of a £200 loan was set to be paid in October, so it is likely that this is when households will receive the £400 one-off payment, which does not need to be repaid.

What support has already been given to help with the cost of living crisis?

All households will receive a £400 grant to help cover their energy bills, a move which replaces the previously proposed £200 loan, which would need to be paid back. (Photo by Sean Gallup/Getty Images)

It follows on from the £150 council tax rebate that was issued this month by Sheffield Council to help support residents with their energy bills.

Further support may be available from the Household Support Fund - to apply you need to be over 16 years of age, and have proof of your financial circumstances to qualify for support.

What other support measures have been announced?

The chancellor also announced that one-off payments of different amounts will be given to vulnerable groups such as the elderly or disabled, as well as those with the lowest incomes.

Chancellor Rishi Sunak also announced additional support measures including a £650 payment to low-income households, a £300 payment for pensioners who receive the winter fuel allowance, and a one-off disability payment of £150. (Photo by Leon Neal/Getty Images)

Eight million low-income households will get an additional one-off payment of £650 to help with soaring costs. This will be paid in two lump sums.

There will also be a one-off cost of living payment for the disabled of £150.

Pensioners that receive a winter fuel payment will get a one-off payment of £300 to help heat their homes. This means some pensioners could see a cost-of-living support package of £800.

How is the Government funding the support package?

The support will be funded through a windfall tax on energy companies, at the rate of 25 per cent.

This will form about £5bn of the £15bn support package, with the chancellor needing to borrow to fill the gap.

The levy on the profits of oil and gas companies will be phased out when prices return to more typical levels.

Why did the Government not impose a windfall tax on energy companies sooner?

The Government was initially opposed to the idea of imposing a windfall tax, believing it could deter companies from investing in the UK.

However, the compromise reached is that the more a company invests, the less tax they will pay.

What is a windfall tax?

A windfall tax is a one-off tax imposed by a government on a company.

It is a tax on "the excess profits of the privatised utilities", and was originally introduced by Tony Blair’s Labour government in 1997.