Rishi Sunak accused of 'throwing red meat to socialists' with windfall tax

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Rishi Sunak, the Chancellor, is pictured in the House of Commons this afternoon - AFP
Rishi Sunak, the Chancellor, is pictured in the House of Commons this afternoon - AFP

Tory MPs have warned Rishi Sunak that his windfall tax on oil and gas giants could stifle economic growth as the Chancellor was accused of “throwing red meat to socialists”.

Mr Sunak announced he is imposing a tax on the excess profits of energy firms to fund a new Government spending spree to help struggling households cope with the cost-of-living crisis.

But the prospect of a new tax on business prompted warnings from some Tory MPs who questioned whether it is consistent with Conservative values.

David Davis, the former Cabinet minister, said that “stability of tax and low tax both encourage investment and growth” as he asked Mr Sunak: "Is there not a risk that the Exchequer will lose more in growth than it will gain in the windfall tax?"

Fellow Tory MP Richard Drax said: “Can I warn (Mr Sunak) that by throwing red meat to socialists by raising taxes on businesses and telling them where to invest their money is not the Conservative way of encouraging those who create our prosperity and jobs to do just that.”

​​Follow the latest updates below.

03:17 PM

That is all for today...

Thank you for joining me for today's politics live blog.

I will be back early tomorrow morning.

03:04 PM

Tory MP submits letter of no confidence in PM

Stephen Hammond, the Tory MP for Wimbledon, has announced he has submitted a letter of no confidence in Boris Johnson's leadership.

Mr Hammond, who has been an MP since 2005, said the conclusions of the Sue Gray report were "damning for the Prime Minister".

He said in a statement published on his website that he had said "consistently throughout I cannot and will not defend the indefensible".

He said: "Since 9 December I have been critical of the Prime Minister’s behaviour and the culture that existed in Number 10. All I can do as a backbencher is speak out and submit a letter."

02:55 PM

'Mr Sunak is engaging in some serious redistribution from rich to poor'

Paul Johnson, the director of the Institute for Fiscal Studies think tank, said the result of Rishi Sunak's announcements today is that "on average the poorest households will now be approximately compensated for the rising cost of living this year".

However, he said the "flat rate nature of payments to benefit recipients does mean... the package is less generous to poor families with children than to those without".

He added: "Even so, put these benefit increases alongside the tax rises just implemented, and Mr Sunak is engaging in some serious redistribution from rich to poor - albeit against a backdrop of rising inequality."

Mr Johnson also said that families who are "just out of reach of the means-tested benefit system" are likely to feel "hard done by relative to the generous treatment of those families not so different from them who are receiving benefits".

02:45 PM

UK tax take creeping towards £1 trillion mark

Paul Johnson, the director of the Institute for Fiscal Studies think tank, has pointed out that the annual tax take in the UK could soon hit the £1 trillion milestone.

02:38 PM

Theresa May attempts impression of the Queen

Theresa May attempted an impression of the Queen this afternoon as she paid tribute to the nation’s “rock” during a debate in the House of Commons to mark the monarch's Platinum Jubilee.

The Conservative former prime minister recalled a visit to Balmoral and being driven by the Queen to an evening BBQ.

While discussing the Queen’s “great love and understanding” of the countryside, Mrs May told the Commons: “There was a gate on the track and in front of the gate stood a very large stag. Her Majesty slammed on the brakes and said: ‘What’s he doing here?’

“To most drivers that would have meant ‘why is he in my way’, but not to Her Majesty. As she explained, she knew the deer should be on a different part of the hillside, she couldn’t understand why he had come down so low. She knew the countryside, she knew its animals.”

02:27 PM

A summary of Rishi Sunak's new cost of living measures

The main announcements made by Rishi Sunak today were:

  • The imposition of a temporary windfall tax of 25 per cent on the excess profits of oil and gas firms to raise £5 billion a year.

  • Turning a £200 loan into a £400 grant for all households to help on energy bills.

  • Eight million of the lowest income households will receive a one-off payment worth £650.

  • Pensioners in receipt of winter fuel payments will receive a one-off sum of £300 while those receiving disability benefits will receive an extra £150.

02:14 PM

Exclusive: Harriet Harman set to lead inquiry into claims Boris Johnson misled Parliament

A former acting leader of the Labour Party is set to become the chairman of the committee that will decide if Boris Johnson intentionally misled Parliament over partygate.

Harriet Harman, who is also the longest-serving female MP, is the most likely candidate to lead an inquiry by Parliament’s Privileges Committee that could suspend the Prime Minister from the Commons.

The Telegraph understands her name has been provisionally agreed by Labour as a replacement for Chris Bryant, who has recused himself from the investigation into Mr Johnson because he has been too outspoken about partygate already.

Ms Harman would then be elected by the MPs on the committee as its new chairman.

You can read the full story here.

02:06 PM

How long will the windfall tax remain in place?

Rishi Sunak told the House of Commons that his new windfall tax on oil and gas giants will only be temporary, remaining in place until “prices return to a more normal level”.

The Treasury's intention is to "phase out" the tax when prices fall to "historically more normal levels".

The legislation underpinning the levy will include a "sunset clause" - a hard cut-off point - of December 31, 2025.

01:56 PM

Think tanks respond to Cost of living measures

Here is some of the reaction to Rishi Sunak's cost of living measures from a range of think tanks:

Centre for Policy Studies: "This is a significant package of support targeted at those on the lowest incomes, and it will bring welcome relief to many families facing eye-watering increases in their bills. The Chancellor is right to use the means-tested benefits system to ensure cash goes to those who need it most, as we have been advocating for at the CPS. It is important to emphasise that these measures are pain relief, not a complete anaesthetic.”

Social Market Foundation: “It is good news that the Chancellor has finally produced a response that reflects the scale of the economic pain poorer households are facing. These cash payments to households with the lowest incomes are the simplest and most effective way for the Government to deliver much-needed help. Having wasted months with over-elaborate schemes, it is extremely welcome that he has joined us in recognising that the best way to help struggling families is the most straightforward: give them cash they need to deal with higher prices."

Adam Smith Institute: "A conclusion the Chancellor never should have reached was that a windfall tax is a good idea. Spending months arguing against it both practically and ideologically and then caving to pressure from the left leaves much to be desired for a ‘fiscally conservative’ Chancellor."

01:50 PM

'Elizabeth the Great' praised by Boris Johnson

Boris Johnson hailed the Queen as "Elizabeth the Great" in a tribute in Parliament this afternoon ahead of her Platinum Jubilee.

"No monarch, by her efforts and dedication and achievement better deserves the attribute of greatness and for me she is already Elizabeth The Great," Mr Johnson told MPs.

"I hope in the coming days that we can together further comfort her and reassure her and show with every bonfire, with every concert and street party and aerobatic display a love and a devotion to reciprocate the love and devotion and leadership she has shown to the whole country over seven decades.

"And on behalf of the whole House, let me say as the scholars of Westminster cried out from the Abbey's triforium on Coronation Day, 70 years ago: Vivat Regina Elizabetha - God save Queen Elizabeth."

Sir Keir Starmer, the Labour leader, said the Jubilee celebrations marked "the way that she's done it, and the way she has enhanced us all. We celebrate her not for representing our great nation, but for making it greater still. We celebrate her not just for being our Queen, but being a Queen for all her people."

01:40 PM

'Disappointed, embarrassed and appalled'

A prominent Conservative backbencher said he was "disappointed, embarrassed and appalled" by the confirmation of a new windfall tax on oil and gas giants.

Speaking to the Telegraph, Craig Mackinlay, the chairman of the Net Zero Scrutiny Group, said: "Whichever way you look at it, a 65 per cent tax rate applied to an industry that we need to encourage to help us through our energy policy mess seems topsy-turvy.

"Higher taxes can never mean lower prices. All in all, I’m disappointed, embarrassed and appalled that a Conservative Chancellor could come up with this tripe.”

01:38 PM

Taxes could be passed back to consumers, warns Tory MP

Greg Smith, the Conservative MP for Buckingham, warned Rishi Sunak a "huge risk" of increasing tax was that businesses "will seek to pass that increased overhead back to consumers".

Mr Sunak said the evidence from previous iterations of a windfall tax is that "doesn't happen, and the main reason is because these commodities are traded at international prices".

He added he was "very happy to take his point" on the issue.

01:15 PM

Business groups respond to Chancellor's announcements

Business groups and energy firms have responded to Rishi Sunak's announcements. Here is some of the reaction:

Rain Newton-Smith, chief economist at the CBI, said: “Despite the investment incentive, the open-ended nature of the energy profits levy - and the potential to bring electricity generation into scope - will be damaging to investment needed for energy security and net zero ambitions. It sends the wrong signal to the whole sector at the wrong time against a backdrop of rising business taxation elsewhere."

Hannah Essex, co-executive director of the British Chambers of Commerce, said: "Unless steps are also taken to ease business costs, they will likely feed into the inflationary pressure on the economy and quickly eat into the financial support announced today."

Steven Brown, CEO of Orcadian Energy, said: “Doubling investment relief is exactly the vote of confidence in North Sea projects that Orcadian has been calling for."

12:50 PM

Tory MP accuses Chancellor 'throwing red meat to socialists'

Richard Drax, a Tory MP, criticised Rishi Sunak's proposal to impose a windfall tax on oil and gas giants.

He told the House of Commons: “Can I warn (Rishi Sunak) that by throwing red meat to socialists by raising taxes on businesses and telling them where to invest their money is not the Conservative way of encouraging those who create our prosperity and jobs to do just that.

“And does he agree with me that by setting this bar, we’re in danger – were we ever to lose power – of allowing the socialists to raise it, which they would do with relish, again and again and again.”

The Chancellor replied: “I do believe a pragmatic and compassionate Conservative Government would act to provide support to the most vulnerable at a time of acute need, and a fiscally responsible Conservative Government would look to try to fund as much of that as possible in as fair a way as possible.”

12:45 PM

'Too little, too late'

Christine Jardine, the Liberal Democrats' Treasury spokeswoman, said Rishi Sunak's new package of support has "come as too little, too late" for struggling families.

She said the Lib Dems had called for a windfall tax in October and asked the Chancellor: "Will he listen the next time when from this side of the House he gets an idea, a suggestion that would help the people of this country rather than hike up their taxes?"

Mr Sunak said: "Now is the time to act because we have more certainty over what the price cap in the autumn will be. We are two thirds of the way through the observation window, Ofgem has given us a sense and that means we can scale the support appropriately."

12:34 PM

Senior Tory MP expresses warning on windfall tax

David Davis, the former Cabinet minister told Rishi Sunak: "On the windfall tax, it will raise a small amount of money. Stability of tax and low tax both encourage investment and growth.

"Is there not a risk that the Exchequer will lose more in growth than it will gain in the windfall tax?"

Mr Sunak said: "With regard to tax, I do believe it is important to continue to support investment. I believe the way that we have designed the energy profits levy with a doubling of the investment relief in it will mean that companies still have a very strong incentive to invest in the North Sea."

12:23 PM

Rishi Sunak insists impact of spending spree on inflation will be 'manageable'

Mel Stride, the Tory chairman of the Treasury Select Committee, welcomed the Chancellor's package of measures which he described as a "very significant" intervention.

Mr Stride said the direct payments being made to households will "stimulate the economy" and asked Rishi Sunak if he had made an assessment of the "inflationary impact" the moves will have.

Mr Sunak said: "In terms of the inflationary impact, I do believe it will be manageable but he is right to highlight it which is why it is important the support we provide is both targeted where it can make the most difference, that it is temporary, and that it is timely and gets help where required."

12:18 PM

'We pushed for a windfall tax, they adopted it'

Rachel Reeves, the shadow chancellor, claimed victory over the Government's U-turn on imposing a windfall tax.

Ms Reeves said: "We pushed for a windfall tax. They adopted it. We said the buy now, pay later scheme was wrong and now they have ditched it.

"This Government is out of ideas, out of touch and out of time. When it comes to the big issues facing this country, the position is now clear, we lead, they follow."

12:08 PM

Labour accuses Government of 'dither and delay'

Rachel Reeves, the shadow chancellor, said it had taken the Government far too long to bring forward extra help for struggling families.

She told the House of Commons: "For months it has been clear that more was necessary to help people bring their bills down, so what took this Government so long?

"Every day that they have refused to act, £53 million more added to Britain's household bills during this cost-of-living crisis.

"This Government's dither and delay has cost our country dearly."

12:05 PM

Rachel Reeves blasts Rishi Sunak over windfall tax U-turn

Rachel Reeves, the shadow chancellor, said: "After today's announcement let there be no doubt about who is winning the battle of ideas in Britain, it is the Labour Party.

"Today it feels like the Chancellor has finally realised the problems that the country is facing. We first called for a windfall tax on oil and gas producers nearly five months ago to help struggling families and pensioners.

"Today he has announced that policy but he can't dare say the words. It is a policy that dare not speak its name with this Chancellor."

12:01 PM

Rishi Sunak: Total support for pensioners worth £850

Rishi Sunak said that the Government's support package will be worth a total of £850 to pensioners.

Concluding his statement in the House of Commons, Mr Sunak said: "As a result of the measures we have announced today and the action we have already taken this year, the vast majority of households will receive £550.

"Pensioners will receive £850 and almost all of the eight million most vulnerable households in the country will in total receive support of £1,200."

11:43 AM

Rishi Sunak to give a grant of £400 to all homes to help with energy bills

Rishi Sunak said he had already announced a £200 discount from October for all households on energy bills.

He said he had decided that the plan to make people pay the money back has been cancelled and the money will now be given as a grant.

He then announced that the £200 will be doubled to £400 for every household.

The total package of new support is worth £15 billion and when combined with previously announced support, the total is worth £37 billion.

11:40 AM

All of UK to benefit from cash payments

Rishi Sunak said he had announced a "significant set of interventions to support the most vulnerable in our country".

He said the direct payments to the most vulnerable will apply to all parts of the UK.

11:36 AM

£300 extra payment for pensioners

On help for pensioners, Rishi Sunak said that from the autumn some eight million pensioner households in receipt of winter fuel payments will receive a one-off extra payment of £300.

It will be called the "pensioner cost of living payment".

11:34 AM

Rishi Sunak announces £650 payment for worse-off households

Outlining new support for struggling families, Rishi Sunak said there are eight million households which currently rely on help through the benefits system.

He announced the Government will "send directly to around 8million of the lowest income households a one-off cost of living payment of £650".

This will be sent in two lump sums in July and then in the autumn. The money will be paid directly into people's bank accounts. It will cost a total of £5 billion.

11:31 AM

Rishi Sunak says windfall tax will raise extra £5 billion

Rishi Sunak said the new levy on oil and gas firms will encourage investment rather than deter it.

He also said it will raise an extra £5 billion in tax revenue.

11:29 AM

Rishi Sunak announces windfall tax

Rishi Sunak said the oil and gas sector is making "extraordinary profits" and "for that reason I am sympathetic to the argument to tax those profits fairly".

The Chancellor said there is a "sensible middle ground" to allow profits to be taxed and to incentivise investment.

He announced the Government will introduce a "temporary targeted energy profits levy" which will have a "new investment allowance" built into it.

The tax will be charged on profits at a rate of 25 per cent and will eventually phased out.

11:26 AM

Chancellor promises 'timely, temporary and targeted' support

Rishi Sunak told the House of Commons that Government support on the cost-of-living crisis must be "timely, temporary and targeted".

He warned that a long term intervention would risk prolonging and adding to rising inflation.

The Chancellor said "the country should have confidence... we will combat inflation and reduce it over time".

11:24 AM

Rishi Sunak insists inflation can be brought under control

The Chancellor pointed to surging inflation and acknowledged it is putting huge pressure on household finances.

But he insisted "we can get inflation under control".

He added: "It may take time but we have the tools we need... to reduce inflation."

11:21 AM

'We will get through this'

Rishi Sunak said he believes people in the UK realise that the Government cannot solve the cost-of-living crisis entirely.

Mr Sunak said the Government "will not sit idly by" while there is a risk that some families could be hit so hard by the crisis that "they might never recover".

The Chancellor said the Government will "never allow that to happen" as he also stressed "we will get through this".

11:19 AM

Rishi Sunak starts cost of living statement

Rishi Sunak, the Chancellor, is now on his feet in the House of Commons.

Mr Sunak said high inflation "is causing acute distress for the people of this country" and that he knows people are "worried and struggling".

11:15 AM

Rishi Sunak arrives in the Commons

Rishi Sunak, the Chancellor, has now arrived in the House of Commons.

He is sat on the Government frontbench looking through his speech. He will be on his feet shortly.

11:09 AM

House of Commons ready for Rishi

The business statement in the House of Commons is just wrapping up which means Rishi Sunak's statement on the cost-of-living crisis is just minutes away.

Rachel Reeves, the shadow chancellor, is sat on the Labour frontbench alongside Sir Keir Starmer. Ms Reeves will be responding to Mr Sunak's announcements.

10:32 AM

Poll: One in five people now struggling to make ends meet

A new snap poll conducted by YouGov has found that one in five people - 22 per cent - now say they are struggling or unable to make ends meet.

That number represents a 12 point rise from the same time last year when it was 10 per cent.

Meanwhile, 50 per cent of people say their household financial situation has deteriorated in the last month and three in five - 60 per cent - expect it to get worse in the coming months.

10:15 AM

Liz Truss accuses Vladimir Putin of trying to 'hold the world to ransom'

Speaking during a visit to Sarajevo in Bosnia Herzegovina, Liz Truss accused Vladimir Putin of trying to “hold the world to ransom” through Russia’s blockade of Ukrainian grain exports.

The Foreign Secretary rejected a demand by the Russian President for the lifting of international sanctions on his country in return for allowing exports to resume through the Black Sea port of Odesa.

Ms Truss said: “It is completely appalling that Putin is trying to hold the world to ransom. He is essentially weaponising hunger and lack of food among the poorest people around the world. We simply cannot allow this to happen.

“Putin needs to remove the blockade on Ukrainian grain. We will do all with our allies and partners to get the grain out of Ukraine and supply the rest of world. What we cannot have is any lifting of sanctions, any appeasement, which will simply make Putin stronger in the longer term.”

10:03 AM

Liz Truss warns against 'backsliding' on help for Ukraine

Liz Truss, the Foreign Secretary, is visiting Sarajevo in Bosnia Herzegovina today.

She told reporters that the UK and its western allies must be “in it for the long haul” in support of the people of Ukraine, as she warned against the “appeasement” of Vladimir Putin.

She said: "We need to make sure that we are backing those people in the brave fight for their country. The way we need to go about this is not by offering compromise or appeasement to Putin. It’s about digging deep in our own resources and not backsliding."

09:55 AM

What have the three Tory MPs said about the PM?

Julian Sturdy, David Simmonds and John Baron are the three Tory MPs who have called for Boris Johnson to step down in the wake of the Sue Gray report.

These are the key lines from each MPs' statement.

  • Mr Sturdy: "While I thought it important to wait for the conclusion of the Metropolitan Police investigation and the publication of the Sue Gray report, I am now unable to give the Prime Minister the benefit of the doubt and feel it is in the public interest for him to resign.”

  • Mr Simmonds: "It is clear that while the Government and our policies enjoy the confidence of the public, the Prime Minister does not. Accordingly, it is time for him to step down so that new leadership can take forward the important work of the Government in ensuring that our people and country prosper.”

  • Mr Baron: “Having always said I would consider all the available evidence before deciding, I’m afraid the Prime Minister no longer enjoys my support – I can no longer give him the benefit of the doubt.”

09:49 AM

How many Tory MPs have withdrawn their support from the PM?

There has been a steady stream of Conservative backbenchers criticising Boris Johnson and calling for him to quit in recent months.

By The Telegraph's count there are approximately 20 Tory MPs who have publicly urged Mr Johnson to step down.

You can read the full updated list here.

09:20 AM

Another Tory MP urges Boris Johnson to quit

David Simmonds, the Tory MP for Ruislip, Northwood and Pinner, said "it is time" for Boris Johnson "to step down".

He said in a statement first issued to The Times: “I listened to what the Prime Minister had to say at Prime Minister’s Questions, his statement and the 1922 Committee yesterday following the publication of the Sue Gray report.

“Having reflected on what he said, and the views of constituents and my Conservative Association, it is clear that while the government and our policies enjoy the confidence of the public the Prime Minister does not.

“Accordingly, it is time for him to step down so that new leadership can take forward the important work of the government in ensuring that our people and country prosper.”

09:12 AM

Today's Matt cartoon

Today's Matt cartoon - Matt Pritchett
Today's Matt cartoon - Matt Pritchett

09:06 AM

Pictured: Rishi Sunak leaves Downing Street this morning

Rishi Sunak is pictured leaving Downing Street this morning ahead of delivering a statement in the House of Commons - John Sibley/Reuters
Rishi Sunak is pictured leaving Downing Street this morning ahead of delivering a statement in the House of Commons - John Sibley/Reuters

08:48 AM

'I’m afraid the Prime Minister no longer enjoys my support'

John Baron, the Tory MP for Basildon and Billericay, has become the latest Conservative backbencher to withdraw his support from Boris Johnson and call on the PM to resign.

In a statement on his website, Mr Baron said: “The Sue Gray report and the Metropolitan Police investigations paint a shameful pattern of misbehaviour during the pandemic as the rest of us kept to the covid regulations. Those responsible for setting the rules have a special duty to adhere to them.

“However, for me the most serious charge against the Prime Minister is that of knowingly misleading Parliament. Given the scale of rule-breaking in No 10, I can not accept that the Prime Minister was unaware. Therefore, his repeated assurances in Parliament that there was no rule-breaking is simply not credible.

“For some, this may appear a trivial point given world events. Yet a bedrock principle of our constitution is that we can trust the responses we receive in Parliament to be truthful and accurate. Parliament is the beating heart of our nation. To knowingly mislead it can not be tolerated, no matter the issue. Whether or not the Prime Minister is an asset to the party or the country is of less importance.

“Having always said I would consider all the available evidence before deciding, I’m afraid the Prime Minister no longer enjoys my support – I can no longer give him the benefit of the doubt.”

08:26 AM

When will Rishi Sunak deliver his statement in the Commons?

The House of Commons starts sitting from 9.30am today with an hour of digital, culture, media and sport questions and some questions to the Attorney General.

The Commons has just confirmed there will then be an urgent question on the evacuation from Afghanistan. That is likely to last until 11.15am or 11.30am.

Then we will have the business statement when the Commons Leader will answer any and all questions from MPs, usually for about 45 minutes, and then Rishi Sunak will deliver his statement on the cost of living crisis.

It is hard to predict with certainty, but it looks like Mr Sunak will be on his feet just after noon.

08:15 AM

'The rot starts from the top'

Lisa Nandy told ITV's Good Morning Britain programme that the Sue Gray report had revealed "a rot in government" and the "rot starts from the top".

Labour's shadow levelling up secretary said: "I’d love to move on, I’d love to see the Government focusing on dealing with the cost-of-living crisis that has affected most families and businesses in this country at the moment, and Russian aggression in Ukraine.

“But the trouble is, that as this report lays bare, there is a rot in government and the rot starts from the top."

08:12 AM

Steve Barclay defends PM for saying goodbye to leaving staff

Boris Johnson said yesterday that he believed saying farewell to staff who were leaving their roles in No 10 during the pandemic was part of his job as leader.

The PM has faced criticism because while he was able to say goodbye to his employees many people across the country could not say goodbye to loved ones at funerals.

Asked why Mr Johnson was able to say goodbye to staff while other people could not even visit a grave, Steve Barclay said: “Because they were already in the building. They were already working in tight-knit groups. They were already there.”

08:06 AM

Lisa Nandy: Partygate has damaged trust in politics

Lisa Nandy has warned the partygate scandal has undermined the public's trust in the UK's political system.

She told BBC Breakfast: "Trust is the glue that holds up the political system together, and when that trust is gone the whole system collapses, and that is why what is happening at the moment with partygate is so devastating for most people in this country.”

08:02 AM

'He’s sorry that he was caught'

Lisa Nandy, Labour's shadow levelling up secretary, has accused Boris Johnson of failing to take full responsibility for the partygate scandal following the publication of the Sue Gray report.

She told BBC Breakfast: “His full responsibility has resulted in him passing off responsibility to more junior staff members who’ve been fined and have taken the rap for what has been going on on his watch, under his Government, under his leadership.

“He hasn’t resigned, he’s apologised belatedly when he was caught, he’s not sorry that he did it, he’s sorry that he was caught."

07:58 AM

Steve Barclay insists Boris Johnson has 'honour'

Steve Barclay, the No 10 chief of staff, was asked during an interview on Sky News if he believes Boris Johnson has "honour".

The Tory MP replied: “Yes, he does.”

He was then asked if Mr Johnson "tells lies".

Mr Barclay said: “No, he doesn’t.”

07:51 AM

Boris Johnson was 'shocked' by Sue Gray report

Steve Barclay, the No 10 chief of staff, said Boris Johnson was "shocked" when he read the Sue Gray report yesterday morning.

Asked for his reaction to the report, specifically the revelation that security and cleaning staff had been subjected to "unacceptable" treatment, Mr Barclay said: “Well, the Prime Minister was appalled to read that when he got that report that he himself commissioned yesterday morning.

“That is why he has made such significant changes and those changes are recognised in the report and it is also why he went personally to apologise to staff yesterday because he was so shocked by what he read.”

07:44 AM

The wider context on energy bills

Ofgem estimated earlier this week that the energy price cap will increase to £2,800 in the autumn. It is currently at about £2,000 and was about £1,300 in October last year.

Rishi Sunak had previously unveiled a £200 discount on energy bills, with the money to be paid back in £40 chunks over a five year period.

The Treasury has now agreed to ditch the loan part of the deal and increase the discount amount. We do not know for certain how much of an increase there will be, but reports have suggested it could be upped to £400.

Today's announcement will mean Mr Sunak can declare that around 28 million households are getting money off their energy bills, without a need to repay it, from October.

However, even after the increase, the level of support will still be dwarfed by the expected jump in bills later this year.

07:37 AM

Shadow chancellor claims Rishi Sunak 'dragged his feet' on windfall tax

07:35 AM

Steve Barclay: 'Huge pressure coming for families'

Labour has been calling for a windfall tax for months and the Government had said it was not attracted to the idea but it was not being ruled out in the future.

Steve Barclay, the No 10 chief of staff, was asked why Boris Johnson and Rishi Sunak had changed their minds on the tax and he said the Government's proposal is different to Labour's which would have "deterred investment" in new energy sources.

He told Sky News: "What we have said throughout is we need to do two things. Firstly recognise that there is a huge pressure coming for families in terms of energy costs, actually there is a huge pressure now, but we can see coming to the autumn that that is going to get worse.

“So we need to be in a position to have targeted support to those families but then in terms of paying for that as we look at the balance between how much is done through debt and how much is done through revenue raising, we need to do that in a way that doesn’t deter investment.”

The Government's approach is expected to see the amount paid in tax linked to the amount oil and gas firms invest. “The more you invest, the less you contribute,” was how one source described it.

07:26 AM

No 10 chief of staff defends timing of cost of living announcement

The timing of the Government's new announcement on cost of living support has raised eyebrows in Westminster, coming just one day after the Sue Gray report into partygate was published.

But Steve Barclay, the No 10 chief of staff and a Tory MP, has rejected the suggestion that the Government is trying to distract from the report.

Asked about the timing, he told Sky News: “I think it is because we have had the Ofgem guidance. Firstly, on the Sue Gray report we don’t control the timing of that… what we have always said is in terms of the fiscal response we wanted to see from the Ofgem guidance what the full impact would be in the autumn on families so that we can get the design of that package right, so it is absolutely logical.

“We have had that guidance this week from Ofgem, that is why the Chancellor is coming forward today. It is also, in terms of parliament and the parliamentary timetable, parliament will be off next week for the Jubilee, so it is logical before Parliament goes into a recess on the back of the Ofgem guidance this week that we then bring forward this statement.”

07:22 AM

What is Rishi Sunak expected to announce?

Rishi Sunak will today unveil a new package of support to help address the cost of living crisis. This is what we are expecting:

  • An increase to the £200 energy bill saving unveiled earlier in the year and scrapping plans to make people pay the money back over the coming years.

  • A windfall tax on oil and gas to pay for the move with the amount companies pay linked to how much they invest in the UK.

  • New targeted support for the poorest households, potentially through changes to Universal Credit or in the form of extra help for pensioners.

You can read the full overnight story on the package here.

07:11 AM

Good morning

Good morning and welcome to today's politics live blog.

The Government will today try to move on from the partygate scandal as Rishi Sunak unveils a new package of support to address the cost of living crisis.

We are expecting the Chancellor to make a statement in the House of Commons later this morning.

I will guide you through the key developments.

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