Cost of living package 'life raft' for households but calls for more long-term plans

Rishi Sunak offered a “life raft” to families struggling with the cost of living yesterday, as those feeling the tightest squeeze from the cost of living crisis are set to receive £1,200 in support.

Households across the country will receive £400 off their energy bills and £5billion will be raised by taxing energy giants, following weeks of pressure on Ministers to help those feeling the pinch.

However, there were warnings that some households still will not be able to make ends meet, despite the £15billion package, as charities said that those on the lowest incomes need the security of long-term help, rather than relying on “one off acts of generosity” and cash injections.

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Meanwhile, one Yorkshire peer called on Ministers to go further in tackling the “excessive profits” of energy companies

Chancellor Rishi SunakChancellor Rishi Sunak
Chancellor Rishi Sunak

Included in the emergency measures announced by the Chancellor yesterday was confirmation that oil and gas companies will be charged a temporary 25 per cent levy on their profits to compensate for the record profits firms have made during the unprecedented spike.

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

In addition, the £200 energy bill loan announced earlier this year will now no longer need to be repaid, and the payback will be upped to £400 for all households.

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More than 8 million people who receive means tested benefits will receive a one off payment of £650 from the Government, to be paid in two installments over the coming months.

Pensioners will also receive a one-off payment of £300.

While those on disability benefits will get an additional £150 on top of any other payments.

The interventions mean that the most vulnerable households in the country will receive £1,200, Rishi Sunak said, as he pointed out that is the same sum by which the people’s bills are expected to have risen year on year by the autumn.

The package has been widely welcomed by experts, however some have expressed concern that there may still be some gaps.

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Dame Clare Moriarty, chief executive of Citizens Advice, said the “hugely welcome” measures will be a “life raft” for millions of people who have been struggling.

Michael Clarke, head of information programmes at Turn2us, said one-off payments “will only act as a sticking plaster until longer term investment materialises.

He added: “A key reason people have been struggling to stay afloat is because benefits have failed to keep up with the cost of living for years.

“The package of support announced today goes part way to rectifying this, but more must be done in the longer term to ensure everyone can afford the basics and not be reliant on one-off acts of generosity from the Chancellor.”

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Conservative peer Baroness Anne McIntosh of Pickering described the measures as “very welcome” and one that “recognises that we’re living at a time of unprecedented crisis”.

However, she called for additional action on “what appear to be the excessive profits” of electricity firms.

In the Commons earlier, Mr Sunak said the Government was “urgently evaluating the scale of the extraordinary profits” of electricity generation sector and are considering “the appropriate steps to take”.

Baroness McIntosh raised the issue in the Lords yesterday afternoon, with Minister Baroness Penn and told the Yorkshire Post: “I welcome the fact that the Minister says the Government has undertaken to look at this and they want to see the best way of tackling this.

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