the times | Friday May 27 2022 2GM 9News
via lump sums in July and in the
autumn. In November or December,
one-off payments of £300 will go to
homes with at least one pensioner, and
£150 to those on disability benefits.
The additional help means that some
households will receive as much as
£1,650, with the average close to £700.How is the Treasury paying for this?
Increased borrowing and a £5 billion
windfall tax on oil and gas companies
will fund the scheme. Energy firms
already pay 40 per cent of their profits
in tax, but the extra levy will make it
65 per cent until December 2025.
Companies that reinvest in British oil
and gas exploration will get back
90 per cent of the new tax in relief.Will it be enough?
Sunak and Boris Johnson acknowledge
they cannot protect people entirely
from soaring inflation. This year the
energy price cap will have risen from
£1,277 to £2,800. While Sunak’s planswill mitigate the impact, for many
households it will not do so entirely.
The most protection has been given to
the poorest households.Is the package inflationary?
Yes. The risk to the Treasury is that the
package will make it harder to control
inflation and increase interest rates.
The Treasury’s view is that a package
was needed to help people deal with
the shock of higher prices.How has the package been received?
Economists have broadly welcomed
the measures, but there has been
criticism of the windfall tax. While,
Sunak said companies would be able
to write off part of the extra tax by
investing in new North Sea
infrastructure, this facility was not
extended to renewable energy
projects, despite government targets
for net zero. This will make it harder for
companies to avoid paying the vast
majority of the windfall tax.Owners of second homes will receive a
£620 million windfall as part of the
Treasury’s package to help with the cost
of living. Rishi Sunak has announced
that about 772,000 households with
two homes will receive an £800 dis-
count on their energy bills.
The government will automatically
pay £400 per household towards
energy bills in October — double the
amount previously promised by the
chancellor.
Second home owners will benefit
from two payments to cover both resi-
dences. The same applies for people
who own three homes, meaning that
about 61,000 people are in line for
payments totalling £1,200.
Sunak is himself the owner of three
homes in Britain, including a £7 million
five-bedroom mews house in Kensing-
ton, west London, and a first-floor flatNews
wealth from richest to poorest
Quentin Letts
Rishi was caving in to a windfall
tax but refusing to utter its name
S
pending alert: Rishi Sunak
was using his mega-handouts
voice, the slow, sad-eyebrows
one with the “sorry,
Jemima, but your hamster’s
been gobbled by the
dog” tone. Last time he used that
voice, during Covid, it cost us
£400 billion. Now there was an
energy-inflation crisis.
“The government will never stop
trying to help people,” purred
Sunak, so damp you could have
fattened strawberries on him. “We
have the tools. We will get through
this.”
A Labour heckler: “You might
not.”
Rachel Reeves, the shadow
chancellor, had not looked so
happy since her wedding day.
Another juicy tax hike, and this
time she could claim to be its
creator. “Let there be no doubt as
to who is winning the battle of
ideas!” she cried. To have parented
a £5 billion annual tax grab: Jeremy
Corbyn would eat his Chairman
Mao cap to be able to make such a
boast.
When Sunak, in his opening
statement, announced that he was
“sympathetic” to the idea of an
“energy profits levy” there was a
tremendous volley of laughter on
the Labour benches. The
euphemism was delicious, like
Nicholas Ridley calling the poll tax
“the community charge”. Sunak
was caving in to the windfall tax
but refusing to utter its name.
Reeves threw back her head as if
gargling a mouthful of Morrisons
amontillado.
Sir Keir Starmer looked at heradoringly and followed her lead.
He’s not the most original of beasts.
Angela Rayner, Labour’s deputy
leader, was sadly absent. She
therefore missed her cherished
comrade’s moment of glory.
Laughing at Rishi: oh, the bliss of
it. So much preferable to having to
grind your molars back during
lockdown when he treacled on
about putting his arms round every
citizen. “We first called for a
windfall tax six months ago,”
honked Reeves. “We were calling
for it last October,” snapped
the Lib Dems. “We wanted it in
2020,” claimed the Scots Nats.
If the Green woman had only
bothered to turn up, she could
have claimed to have been
banging on about it as a
Malvern Girls’ College
bluestocking back when
Jim Callaghan was in
power.
The current prime
minister was sitting
beside Sunak, cheerfully
grunting across the
Commons table at two
shadow cabinet
members, Jonathan
Ashworth and Pat
McFadden. I am fairly
sure I heard Ashworth
shout “pollocks”. Odd time
to be discussing the price
of fish.
Bob Blackman (C, Harrow East)
looked less energised about the
new tax. He placed a hand over his
entire face. The Thatcherite John
Redwood (C, Wokingham) slumped
so low he could have been riding
one of those horizontal tricycles.
Richard Drax (C, South Dorset)
feared that “throwing red meat to
socialists is not the Conservativeway of encouraging those who
create prosperity”.
Sunak, who smiled ruefully at
these criticisms and at Labour’s
mocking, argued that his levy had
been designed with investment
incentives. David Davis (C,
Haltemprice & Howden) gave the
statement an “unreserved
welcome” while at the same time
worrying about the hit to growth.
How unlike DD to chew corn from
both ends of the cob. Richard
Burgon (Lab, Leeds East) raged
about “undeserved profits”. Does
he ever consider profits
“deserved”? Kirsten Oswald (SNP,
East Renfrewshire) kept a straight
face while alleging that the oil tax
showed Scotland was bailing
out the rest of the British
economy.
There was a “boinggg”,
as would happen
when Zebedee
appeared in The
Magic Roundabout.
Sir Desmond Swayne
(C, New Forest West)
was on his feet. How
come Switzerland and
Japan had not
seen such high
inflation rises?
“Because they
didn’t leave the EU!”
yelled Gavin
Newlands (SNP,
Paisley and
Renfrewshire North).
Nor would they dream of
doing so, we can say with
confidence.
Imagine a kimono-clad
Jean-Claude Juncker
knocking back the sake at
the official banquet
had Tokyo ever joined
the Brussels union. The
tokkuri bearers would
have been run off their
slippers.Political Sketch
Boinggg! Sir Desmond Swayne did
his best impersonation of Zebedee
from The Magic Roundabout£1,200 off if you have three homes
on the Old Brompton Road near by. He
also owns a £1.5 million Georgian man-
sion in his North Yorkshire consti-
tuency, with planning permission for a
swimming pool and tennis court, and a
penthouse in Santa Monica, California,
that is said to be worth £5.5 million.
It is understood the chancellor will
donate any money he receives from the
scheme to charity.
It emerged this week that household
energy bills would rise to about £2,
in October. Jonathan Brearley, the
chief executive of Ofgem, the energy
regulator, said he expected the price
cap to be lifted from £1,971 when it was
reviewed in the autumn.
When Sunak announced discounts
on energy bills earlier this year, he
promised £200 in the form of loans to
be repaid over five years. He said yester-
day that families would be given grants
of £400 that they did not have to repay.
Sunak said he recognised the “acutedistress” of people dealing with “the
complex and global challenge of infla-
tion”. He said: “We will make sure the
most vulnerable and the least well-off
get the support they need at this time of
difficulty, and we will turn this moment
of difficulty into a springboard for eco-
nomic renewal and growth.”
The support package is being funded
by a mixture of borrowing and a
£5 billion tax on oil and gas companies.
Torsten Bell, head of the Resolution
Foundation, a think tank focused on
those on low to middle incomes, said
the package was “big and very welcome
indeed” and included “large targeted
support for those hit hardest”.
Alison Garnham, chief executive of
Child Poverty Action Group, said: “The
chancellor is kidding himself if he
thinks that the problem is temporary or
that the package he offered today will
stop people finding themselves so far
back that they never recover.”George Grylls Political Reporter((