Cost of living payments for millions as Sunak announces windfall tax on oil and gas profits – UK politics live

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Sir Jeffrey Donaldson (right), the DUP leader, speaking to the media at Stormont today, with a picture of one of his predecessors, Ian Paisley, in the background.

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What thinktanks are saying about Sunak’s cost of living support package

Here is reaction to Rishi Sunak’s cost of living support package from two thinktanks seen as being on the left.

From Torsten Bell, chief executive of the Resolution Foundation

The chancellor has announced a big and very welcome package of support for households facing fast rising energy bills. It almost doubles the level of energy support to over £30bn, and fills the huge gap in previous announcements with large targeted support for those hit hardest.

The decision to provide one-off payments this year to poorer households, pensioners and those with a disability is a good attempt to target those with higher energy bills – although the relative lack of support for larger families stands out.

The chancellor’s commitment to uprate benefits next April in line with very high inflation also offers important security for lower income households that their living standards will be protected from surging prices tomorrow as well as today.

From Miriam Brett, director of research and advocacy at Common Wealth

The biggest threat facing our future is the climate emergency and key to the transition is the need to create a green and just tax system. The UK is already an enormously profitable place for oil and gas companies. Today’s announcement by the Chancellor on the investment allowance to encourage firms to invest in oil and gas extraction in the UK casts fresh doubt on the UK government’s willingness to tackle the climate and environmental crises.

Research by Common Wealth and NEF found that despite its climate commitments, the UK continues to offer a number of tax reliefs for both domestic production and consumption of fossil fuels. In the last five years, the value of UK support to fossil fuels amounted to an average of approximately £12bn a year. A rapid and just phase out of fossil fuel subsidies should be a core component of a just transition.

And here is reaction from two thinktanks on the right.

From James Heywood, head of welfare and opportunity at the 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. The government cannot completely offset the impact of rising prices for every household – many still face an incredibly tough year ahead.

The reference in this quote to “pain relief” is a reminder than in the Sunday Times at the weekend Tim Shipman said Boris Johnson was willing to back Sunak’s plans for a windfall tax, but only if some of the money was spent on nuclear power stations and offshore windfarms, that would cut energy bills in the long run. Shipman quoted an adviser arguing that spending on “surgery” was ultimately more beneficial than spending on “pain relief”. If Shipman was right, today’s announcement shows that Johnson lost the argument.

From Mark Littlewood, director general at the Institute of Economic Affairs

The worst way to make policy is to oppose something half-heartedly in principle, then procrastinate and finally change position as a result of political expediency. It is painfully obvious that in the battle of ideas, the government enters the arena wholly unarmed.

Rachel Reeves, the Shadow Chancellor, is right to say that this represents a policy victory for Labour. The default setting of the Conservatives now is to respond to virtually any problem by increasing taxes and spending even more money. The appetite and ability of the government to lower taxation or reduce the regulatory burden on businesses is approximately zero. The consequence will be a prolonged cost of living crisis and woefully disappointing economic growth.

Sir Jeffrey Donaldson (right), the DUP leader, speaking to the media at Stormont today, with a picture of one of his predecessors, Ian Paisley, in the background. Photograph: Brian Lawless/PA
Libby Brooks

Libby Brooks

There were get well wishes at first minister’s questions in Holyrood earlier as Nicola Sturgeon missed the session after testing positive for Covid last Friday.

Nearly a week on, Sturgeon says she has been “floored” by the virus and is planning to spend the rest of the week at home to recover.

Her absence comes in the week that Sturgeon became the longest serving first minister of the Scottish parliament after 2,743 days in office, overtaking her predecessor Alex Salmond’s day tally on Wednesday.

While there has been much analysis of her time in power as Scotland’s first female FM – covering the SNP’s steller electoral record, Brexit, the Salmond case and inquiry, and of course the pandemic – Sturgeon’s voice has been conspicuously absent.

It’s worth noting how seldom Sturgeon has taken time off, full stop, over the period. Particularly during the early months of Covid, her work ethic made the Stakhanovites look like part-timers.

What thinktanks are saying about Sunak’s cost of living support package

Here is reaction to Rishi Sunak’s cost of living support package from two thinktanks seen as being on the left.

From Torsten Bell, chief executive of the Resolution Foundation

The chancellor has announced a big and very welcome package of support for households facing fast rising energy bills. It almost doubles the level of energy support to over £30bn, and fills the huge gap in previous announcements with large targeted support for those hit hardest.

The decision to provide one-off payments this year to poorer households, pensioners and those with a disability is a good attempt to target those with higher energy bills – although the relative lack of support for larger families stands out.

The chancellor’s commitment to uprate benefits next April in line with very high inflation also offers important security for lower income households that their living standards will be protected from surging prices tomorrow as well as today.

From Miriam Brett, director of research and advocacy at Common Wealth

The biggest threat facing our future is the climate emergency and key to the transition is the need to create a green and just tax system. The UK is already an enormously profitable place for oil and gas companies. Today’s announcement by the Chancellor on the investment allowance to encourage firms to invest in oil and gas extraction in the UK casts fresh doubt on the UK government’s willingness to tackle the climate and environmental crises.

Research by Common Wealth and NEF found that despite its climate commitments, the UK continues to offer a number of tax reliefs for both domestic production and consumption of fossil fuels. In the last five years, the value of UK support to fossil fuels amounted to an average of approximately £12bn a year. A rapid and just phase out of fossil fuel subsidies should be a core component of a just transition.

And here is reaction from two thinktanks on the right.

From James Heywood, head of welfare and opportunity at the 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. The government cannot completely offset the impact of rising prices for every household – many still face an incredibly tough year ahead.

The reference in this quote to “pain relief” is a reminder than in the Sunday Times at the weekend Tim Shipman said Boris Johnson was willing to back Sunak’s plans for a windfall tax, but only if some of the money was spent on nuclear power stations and offshore windfarms, that would cut energy bills in the long run. Shipman quoted an adviser arguing that spending on “surgery” was ultimately more beneficial than spending on “pain relief”. If Shipman was right, today’s announcement shows that Johnson lost the argument.

From Mark Littlewood, director general at the Institute of Economic Affairs

The worst way to make policy is to oppose something half-heartedly in principle, then procrastinate and finally change position as a result of political expediency. It is painfully obvious that in the battle of ideas, the government enters the arena wholly unarmed.

Rachel Reeves, the Shadow Chancellor, is right to say that this represents a policy victory for Labour. The default setting of the Conservatives now is to respond to virtually any problem by increasing taxes and spending even more money. The appetite and ability of the government to lower taxation or reduce the regulatory burden on businesses is approximately zero. The consequence will be a prolonged cost of living crisis and woefully disappointing economic growth.

Tory MP Stephen Hammond reveals he submitted letter calling for no confidence vote in ‘indefensible’ PM some time ago

Another Conservative MP, Stephen Hammond, has come out to declare that they can no longer support Boris Johnson. Hammond has been very critical of Johnson in the past over Partygate, but until now he has not publicly joined those calling for a no confidence vote.

Today, however, he suggests that Johnson is “indefensible” and he implies that he submitted a letter to the 1922 Committee calling for a vote on Johnson’s leadership some time ago. In a statement he says:

I have said consistently throughout I cannot and will not defend the indefensible. I am struck by a number of my colleagues who were really concerned that it’s almost impossible for the PM to say I want to move on, as we cannot move on without regaining public trust and I am not sure that’s possible in the current situation …

Since 9 December I have been critical of the prime minister’s behaviour and the culture that existed in No 10. All I can do as a backbencher is speak out and submit a letter. I guide everyone to my website statements where I have said for several months I already have done all I can as a backbencher.

Tom Larkin from Sky News, who is keeping a tally, says 19 Tories are now on the record calling for a no confidence vote. The true number is thought to be more than double that, because MPs can submit letters in secret. If 54 letters are submitted, the 1922 Committee has to hold a ballot.

Cleaners and security guards to protest outside No 10 over abusive treatment of staff

Emine Sinmaz

Cleaners and security guards contracted to work for the Ministry of Justice will protest outside Downing Street tomorrow following reports that support staff were mocked and left to mop up after lockdown parties.

Sue Gray’s report into the Partygate scandal revealed that cleaners and security guards were subjected to a “lack of respect and poor treatment”, and yet felt “unable to raise [this] properly” with the authorities.

The Public and Commercial Services (PCS) union, which represents outsourced cleaners at the MoJ, said its members will protest against the government’s “culture of disrespect” at 5.30pm tomorrow.

Emanuel Gomes, one of its members, died in April 2020 just hours after cleaning an office in the MoJ. Originally from Guinea, the 43-year-old father and husband felt so ill he could barely stand but felt under pressure to continue working during lockdown because he did not receive sick pay, his family said. He had suspected coronavirus symptoms but his death was officially recorded as hypertension of the heart.

Vicente Gomes, a cleaner at the MoJ and a member of the UVW union, said:

Emanuel and I were from the same country, he was a good person. During the pandemic, while we didn’t have masks and we were on poverty wages, the prime minister broke the law. This is very wrong, this is not normal, he knows the law.

Emanuel Gomes’s cousin, Vicente Mendes, who is also a cleaner at the MoJ and a UVW member, said:

Emanuel didn’t receive sick pay and he died without receiving anything. It can’t be like this, I feel very sad.

Petros Elia, general secretary for UVW, added:

It is outrageous to have rowdy and illegal parties during the pandemic but to then expect cleaners to mop up after you and to pay them, as well as porters and security guards, poverty wages, and deny them full sick pay is abhorrent.

Sunak engaged in ‘serious redistribution from rich to poor’, says IFS

The Institute for Fiscal Studies has released a full analysis of the cost of living support measures announced by Rishi Sunak earlier. It says Sunak is involved in “serious redistribution from rich to poor”. This is from Paul Johnson, the IFS’s director.

Rishi Sunak has announced a genuinely big package of support for households. On average the poorest households will now be approximately compensated for the rising cost of living this year. The flat rate nature of payments to benefit recipients does mean, though, that the package is less generous to poor families with children than to those without. 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.

While this is coming at substantial fiscal cost, its supposedly temporary nature means he might not be too worried about the impact on the public finances. We will wait to see how the Bank of England responds to a big fiscal loosening in a period of high and rising inflation. If energy prices remain high, or rise even further, it may turn out hard to ensure these changes are genuinely temporary. And there are inevitably going to be families on modest incomes, who are just out of reach of the means tested benefit system, who will feel hard done by relative to the generous treatment of those families not so different from them who are receiving benefits.

The IFS also says that, as a result of the measures announced today, a worker on median earnings will have very little reduction in real-terms income this year compared with last year. Without any of the measures announced by Sunak this year, they would have faced a loss of more than £500. People working full-time on the “national living wage” will actually see an increase in their real-terms income, the IFS says.

IFS analysis of impact of Sunak’s measures on real take-home income
IFS analysis of impact of Sunak’s measures on real take-home income Photograph: IFS

In the Commons MPs have this afternoon been paying tribute to the Queen, to mark her platinum jubilee. Boris Johnson opened the debate, and like other MPs he praised her lavishly. It would, of course, be far more interesting to hear what the Queen has to say about Johnson, but sadly that option is not available, and so here is an excerpt from Johnson’s speech.

Since the Palace of Westminster was founded more than 1,000 years ago, it has seen war and peace, plague and plenty, the rise and fall of empires and all kinds of revolutions: scientific, industrial, political, ecumenical, stylistic.

And almost 50 monarchs – in trying to rank the achievements of those monarchs it must be admitted that not all of them set exemplary standards of personal behaviour and quite a few were removed violently and prematurely from office.

But in our history, no monarch has ever served this country so long as this one with the first platinum jubilee ever but far more importantly, no monarch has ever served it so well.

Met had to issue Partygate fines on basis of law, not just photos that ‘look bad’, says acting commissioner

In his evidence to the London assembly’s police and crime committee, Sir Stephen House, the acting Metropolitan police commissioner, dismissed suggestions that his force was soft on Boris Johnson when investigating Partygate. He also insisted that, just because a photograph “looks bad”, that does not mean a fine is justified. He explained:

I accept that many of the photographs that we are seeing look bad and Sue Gray’s report has dealt with that.

We deal with the law, not what looks bad. And just because there is alcohol present, can I just remind people that the Covid regulations are about breaching Covid regulations, they’re not about whether there’s drink there or not.

We have to put fixed-penalty notices to people that we think will win in court. And there has to be evidence behind it and there is not always evidence and … a photograph can be somewhat deceptive in these areas.

We need evidence and they need to be proving there is no reasonable excuse behind what was going on.

We have not, I repeat this, we have not shied away from issuing a fixed-penalty notice where we thought it was deserved.

We have policed without fear or favour and I would not have presided over anything less than that.

The Lib Dems say that under their plans a windfall tax on the energy sector would have raised £11bn, not the £5bn that Rishi Sunak expects his to raise. Christine Jardine, the Lib Dem Treasury spokesperson, said:

This is more a levy lite than a windfall tax. The chancellor could have raised double the cash from oil and gas companies if he had the bottle.

The Lib Dems want to impose a 25% windfall tax on the excess global profits of oil and gas producers headquartered in the UK. Sunak’s tax is a 25% tax on UK oil and gas profits, but the investment allowance will enable firms to cut their liabilities if they are investing in the UK.

Boris Johnson leaving Downing Street earlier today.
Boris Johnson leaving Downing Street earlier today. Photograph: Dominic Lipinski/PA

My colleague Polly Toynbee has written a column on Rishi Sunak’s windfall tax U-turn. She says, if it took Partygate to produce this, more parties are needed. Here is an excerpt.

This help comes better late than never, arriving just as the Institute for Fiscal Studies finds inequality taking off again, with the top 1% roaring away, while the poorest people face the highest rate of inflation, which could hit 14% by October. But this is a humiliating U-turn for a government that has made cutting benefits time and again its signature theme.

This climbdown only comes now as its polling and focus groups show most people, including many Tory voters, are not as flint-hearted as the cabinet’s ideologues. Nor do voters blame food bank-users for lack of cooking skills. The tide is turning, as the British Social Attitudes survey is showing, when so many people can see that working hard on low pay doesn’t keep a family afloat.

Labour’s spirits are high. The government may “move on” from Partygate, but the stench will follow them, just as John Major’s government couldn’t shake off “sleaze”. Two imminent byelections will reveal how far Labour still needs to travel. But Rachel Reeves ended her reply today to rousing cheers from Labour benches when she called the benches opposite: “Out of ideas, out of touch and out of time … We lead, they follow.”

And here is the full article.

No 10 spokesperson apologises for misleading media on lockdown parties

Boris Johnson’s official spokesperson has formally apologised for misleading the media in repeatedly denying any parties took place inside Downing Street during lockdown, while insisting this was entirely inadvertent, my colleague Peter Walker reports.

As Peter reports, there will also be no more “wine time Fridays” in the No 10 press office. Downing Street now has a formal policy of alcohol not being allowed except for certain circumstances such as official receptions, the spokesperson told the briefing.

In an interview with Sky News’s Lucy Frazer, a Treasury minister has just confirmed that the government will have to raise borrowing to fund the package announced by Rishi Sunak today. Although he is introducing a windfall tax on energy companies, that is only expected to raise £5bn of the £15bn needed.

Asked how the government could afford to cut taxes if it was also having to borrow more, Frazer said the key thing was to promote growth.

Back to the £15bn cost of living support package, and here is some reaction to Rishi Sunak’s announcement from welfare organisations.

From Paul Kissack, chief executive of the Joseph Rowntree Foundation, the poverty charity

For people living with worry and fear through this cost of living crisis, and especially for those going without essentials, today’s statement will offer very welcome relief. It is right to target help at those on low incomes, who are least able to bear the shock of soaring energy bills.

We are pleased by the commitment to uprate benefits in line with inflation as usual, though it is still crucial that the government invests on an ongoing basis in ensuring that everyone can get through difficult times and afford the essentials.

From Sam Nadel, head of government relations at Oxfam

About time! It’s right that fossil fuel companies making excess profits are being asked to contribute more at a time when so many families in the UK have run out of options and can’t afford to pay the bills, with little left to cut back on.

From Dan Paskins, director of UK impact at Save the Children

Today’s announcement is welcome and will provide much needed breathing space to many families struggling with the cost of living. It’s a generous package, and the chancellor has clearly listened to the unacceptable conditions people have been facing.

From Vicki Nash, head of policy, campaigns and public affairs at Mind, the mental health charity

Today’s announcement by the chancellor of the xchequer of financial assistance for households across the country is welcome, though we remain concerned that people on the lowest incomes will continue to struggle.

We are pleased to see the UK Government recognising the extra costs faced every day by disabled people through a £150 grant to those claiming disability benefits, as well as the decision to give a grant of £650 to 8 million households on the lowest incomes to support with rising living costs. It is also reassuring to hear the Government committing themselves to raising all benefits in line with inflation next year.

From Azmina Siddique, policy and impact manager at the Children’s Society

The money for households announced today will undoubtedly make a positive impact and ease some of the burden for those who are being hardest hit by energy price shocks. Shockingly, when the chancellor listed the ‘most vulnerable’, children didn’t make the cut.

There was an opportunity here to provide targeted support to families with children – a third of whom were already in poverty before the cost of living crisis. Expanding free school meals to all children whose parents are on universal credit or a £10 increase to child benefit could have made a real difference.

House tells the police and crime committee that he has responded to the letter from Sadiq Khan, the London mayor, asking for an explanation as to why Boris Johnson received just one fine.

He says the letter sets out what he told the committee earlier – that various factors were taken into account when deciding who would be fined. It will be published on the Met’s website, he says.

And that’s all the questioning on Partygate. House is now being asked about other policing matters.

Caroline Pidgeon (Lib Dem) is asking questions now.

Q: Were there any people who refused to respond to your questionnaires?

House says that the “vast majority” of people returned their questionnaires. And he says the “vast majority” paid their fines.

If people did not return a questionnaire, that did not stop the Met investigating them, he says.

Acting Met commissioner says is confident that Johnson was not tipped off weeks ago by police that he would get just one fine

Sir Stephen House, the acting commissioner of the Metropolitan police, is giving evidence to the London assembly’s police and crime committee. The first questions have been about Partygate, and there is a live feed here.

Asked to explain why Boris Johnson was not fined for attending the Lee Cain leaving do, where he was pictured drinking, House would not give a specific answer. But he said that a variety of factors were taken into account before decisions to issue fines, including how long people spent at an event, and whether or not it was work related.

Asked if the CPS has been consulted about decisions to issue fines, he said they had been asked about general points of law – but not specific cases.

Asked why the Sunday Times reported several weeks ago that Johnson was telling friends he was only going to get one fine, House said he was confident that Johnson had not been given that assurance by the police. He replied:

I’m very confident that no assurance were given to anyone who was subject of any investigation in relation to Operation Hillman [the Partygate inquiry].

Stephen House giving evidence to the London assembly
Stephen House giving evidence to the London assembly Photograph: London assembly

The TUC has described today’s announcement from Rishi Sunak as “badly needed”, but criticised the government for not having a long-term plan to raise living standards. In a statement, Frances O’Grady, the TUC general secretary, said:

The chancellor should have acted far sooner after his inadequate spring statement. His dither and delay has caused unnecessary hardship and worry for millions. While today’s intervention is badly needed, we should have never been here in the first place …

With energy bills rising 23 times faster than wages we urgently need to get pay packets rising and to pay universal credit at a permanently higher rate – not just a one-off boost. That’s the best way to protect livelihoods and to support the economy.

In his statement Rishi Sunak stressed that his windfall tax would be temporary. But the CBI is criticising it on the grounds that it could be open-ended. (See 1.50pm)

How can they both be right? In his briefing note, the Treasury says that although the intention is for the tax to be temporary, it could last three and a half years.

The energy profits levy will apply to profits arising on or after 26 May 2022. Companies who have an accounting period that straddles that date will be required to apportion their profits. It is temporary and will be phased out when oil and gas prices return to historically more normal levels. The legislation will also include a sunset clause, which will remove the tax after 31 December 2025.

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