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London politics latest live: Rishi Sunak announces windfall tax on energy companies in statement to MPs

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Chancellor Rishi Sunak makes a statement in the Commons on the cost of living crisis.

The Chancellor said the government would provide “meaningful support to the British people”, with inflation soaring and energy bills set to rise another £800 in the fall to millions.

It comes after two Tory MPs called on Boris Johnson to step down amid mounting pressure on the Prime Minister following the publication of the damning Sue Gray partygate report.

John Baron, Tory MP for Basildon and Billericay, said on Thursday morning he could no longer give the Prime Minister “the benefit of the doubt”.

He said: “The most serious charge against the Prime Minister is that of knowingly misleading Parliament. Given the scale of the rule breaches in Number 10, I cannot accept that the Prime Minister was unaware.

His comments were soon followed by David Simmonds, MP for Ruislip, Northwood and Pinner, who called on Mr Johnson to stand down ‘so that the new leadership can carry forward the important work of government to ensure the prosperity of our people and our country”.

Julian Sturdy, MP for York Outer, became the first to call for the Prime Minister’s resignation on Wednesday after the publication of Ms Gray’s report.

It comes as Chancellor Rishi Sunak is set to announce a windfall tax on energy companies, despite resistance to calls for it.

The one-time charge will be used to double the controversial £200 rebate on the energy bill, while the obligation to repay the money will be scrapped, according to reports.

Live updates

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Energy bill discount doubled to £400

The previously announced energy bill discount will now be doubled to £400, while households won’t have to repay the money.

Overall, the new measures will cost the government £15billion, the Chancellor said. Combined with the previous measures, the overall cost will be £37 billion.

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Chancellor announces £300 one-off payment for pensioners

Commenting on pensioners, Mr Sunak said many who are eligible for benefits are not claiming the money.

To help pensioners, he announced a one-off £300 pensioner payment.

He also announced a one-time disability award of £100.

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Chancellor announces £650 for eight million households

He said the tax would generate £5billion in revenue over the next year.

To help with the cost of living, Mr Sunak announced that eight million households will receive a payment of £650.

The fee will be paid in two instalments, the first in July and the second in the fall.

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Rishi Sunak announces energy profit tax

The Chancellor announced a new tax on energy profits which will include an investment deduction.

Energy companies will face a temporary 25% profit tax.

Mr Sunak said: “Like previous governments, including Conservative governments, we will introduce a temporary tax targeted at energy profits, but we have built into the new tax…a new investment allowance similar to the super-deduction which means that companies will have a new and significant incentive to reinvest their profits.

“The new levy will be levied on the profits of oil and gas companies at a rate of 25%.

“This will be temporary and when oil and gas prices return to historically more normal levels, the levy will be phased out.”

As part of the tax, the Chancellor said the “investment allowance” would help support reinvestment in the UK.

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“We will fight inflation,” says Rishi Sunak

Announcing his support package, Mr Sunak said the government had said it was looking for the fairest way to tackle soaring energy prices.

For this reason, Mr Sunak said he adopted fair taxation on profits.

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Rishi Sunak issues statement on cost of living crisis

Speaking in the Commons, the Chancellor said the government had been forced to act to ensure vulnerable people “receive the support they need”.

In his statement ahead of the announcement of the cost-of-living package, Mr Sunak said he was targeted and “timely”.

He said: “This government will not sit idly by while there is a risk in this country that some will be pushed back so far that they will never recover.

“I want to reassure everyone – we will get through this.

“We will ensure that the most vulnerable and less fortunate receive the support they need.”

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Martin Lewis: What I asked the Chancellor to do to help Britons

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Sir Ed Davey comments on the Partygate report

Lib Dem leader Sir Ed Davey said it was ‘shocking’ that Tory MPs took no action against the Prime Minister after the publication of Sue Gray’s report.

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Work: the Chancellor dragged into the tax on windfall profits

Rachel Reeves, shadow chancellor, said the Rishi Sunak was “dragged kicking and screaming” in a bespoke U-turn.

She said: ‘Well, it looks like the Chancellor is finally being kicked and screamed into a U-turn, and four months late embracing Labour’s call for a windfall tax on oil producers’ profits and gas.

“Why did it take so long? Why did the families have to struggle and worry while he dragged his feet?

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Sunak will announce a “very big” intervention

Although it is unclear how much the Chancellor’s new support package will cost, Steven Swinford of The Times says it could top £10billion.