UK Chancellor Rishi Sunak will on Thursday unveil a significant rescue package to ease the cost-of-living crisis, partly funded by a windfall tax on energy companies.
Mr Sunak’s plans could be worth more than £10 billion ($12.59bn) and will be mainly focused on the poorest households and pensioners, while raising up to £7bn from a tax on the super profits of energy providers.
Steve Barclay, the Downing St chief of staff, said the new taxation could be put in place without deterring investment. Speaking on Thursday he said the government decided to act after the regulator, Ofgem, lifted the price cap on household fuel bills for later in the year. “What we’ve 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," he said.“We’ve had that guidance this week from Ofgem. That is why the Chancellor is coming forward today.”
Although many Conservative MPs will be delighted that Mr Sunak is acting to ease the cost of living, some on the right are furious that he is planning a windfall tax to raising several billion pounds to help fund it.
North Sea oil and gas company executives said they were resigned to the tax on profits, which Mr Sunak had previously rejected, saying it would hit investment.
They believe a tax on electricity profits could still be on the table for the autumn, when households turn their heating back on.
Offshore Energies UK, which represents the offshore oil and gas industry, has warned a one-off tax on North Sea companies would lead to higher prices and do long-term damage to the industry.
"This is an industry that thinks and plans long-term, so sudden new costs like this proposed tax will disrupt planning and investment and, above all, undermine investor confidence,” said Deirdre Michie, chief executive of the OEUK.
Profits of energy companies have been boosted by the surge in oil and gas prices after Russia’s invasion of Ukraine.
Critics say energy companies are benefiting from a surge beyond their control and a year-long, one-off levy on their profits could help to support troubles households.
But Ms Michie said it was already the country’s most highly taxed industry, paying 40 per cent on their offshore profits, and operators would send the Treasury £7.8bn this financial year.
This, she said, was equal to £279 a household.
Ms Michie said the industry was “actually very proud to pay our taxes” but warned “the problem is when new taxes are imposed suddenly and without consultation”.
“The UK offshore industry needs a stable and predictable regime," she said.
"A windfall tax may not affect projects already under way but is likely to deter investments under consideration, for which funds have yet to be committed.
“The result would be a decline in oil and gas production in years ahead, just when the UK most needs reliable sources of energy.”
Ministers have spent months criticising the idea of a windfall tax because of its possible effect on investment.
“Rishi has made no attempt to win over critics of the policy,” a Cabinet source said.
But on Wednesday, a Conservative source said the arguments had been “tested rigorously” in the Treasury and wider government.
“There’s a high threshold that any package that we bring forward delivers more gain than pain, that the gain is worth the pain, that it does not jeopardise the investment,” he said.
“You don’t introduce random taxes that make the economic environment unpredictable.”
The Times reported that the previously announced £200 loan on energy bills would be replaced with a grant that would not have to be paid back, with the discount possibly increasing to as much as £400.
Other measures that have been discussed as part of a package could include a further increase to the "warm homes discount" to help low-income households cope with rising energy bills.
If Mr Sunak offers help through this discount, the payment will go directly to energy suppliers, easing fears that the companies could go to the wall this winter with customers unable to pay bills.
The need for extra help was illustrated by Ofgem chief executive Jonathan Brearley’s indication that the energy price cap will increase by another £830 to £2,800 ($3,500) in October.
Domestic energy prices will have risen by £1,500 in a year.
There have also been discussions around increasing the winter fuel allowance and making more cuts to council taxes.
Mr Sunak has also been under pressure from Tory MPs to offer a universal tax cut — perhaps an income tax reduction or the scrapping of VAT on domestic fuel — to prove he does not intend to keep putting up taxes.
He will need to be careful that any extra help he puts in to the economy does not add further to inflation, which is running at a 40-year high, with the Bank of England expecting it to pass 10 per cent in the autumn.
Mr Sunak’s ability to help beyond the £22bn package already announced will also be restricted by the state of the nation’s finances.
COMPANY PROFILE
Name: Mamo Year it started: 2019 Founders: Imad Gharazeddine, Asim Janjua Based: Dubai, UAE Number of employees: 28 Sector: Financial services Investment: $9.5m Funding stage: Pre-Series A Investors: Global Ventures, GFC, 4DX Ventures, AlRajhi Partners, Olive Tree Capital, and prominent Silicon Valley investors. Killing of Qassem Suleimani
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
The years Ramadan fell in May
BUNDESLIGA FIXTURES
Friday (all kick-offs UAE time)
Hertha Berlin v Union Berlin (10.30pm)
Saturday
Freiburg v Werder Bremen (5.30pm)
Paderborn v Hoffenheim (5.30pm)
Wolfsburg v Borussia Dortmund (5.30pm)
Borussia Monchengladbach v Bayer Leverkusen (5.30pm)
Bayern Munich v Eintracht Frankfurt (5.30pm)
Sunday
Schalke v Augsburg (3.30pm)
Mainz v RB Leipzig (5.30pm)
Cologne v Fortuna Dusseldorf (8pm)
War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
Killing of Qassem Suleimani
Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
The%20specs%20
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.0-litre%204cyl%20turbo%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E261hp%20at%205%2C500rpm%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E400Nm%20at%201%2C750-4%2C000rpm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E7-speed%20dual-clutch%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%20%3C%2Fstrong%3E10.5L%2F100km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh129%2C999%20(VX%20Luxury)%3B%20from%20Dh149%2C999%20(VX%20Black%20Gold)%3C%2Fp%3E%0A
THE BIO
Ms Al Ameri likes the variety of her job, and the daily environmental challenges she is presented with.
Regular contact with wildlife is the most appealing part of her role at the Environment Agency Abu Dhabi.
She loves to explore new destinations and lives by her motto of being a voice in the world, and not an echo.
She is the youngest of three children, and has a brother and sister.
Her favourite book, Moby Dick by Herman Melville helped inspire her towards a career exploring the natural world.
Killing of Qassem Suleimani
CREW
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ERajesh%20A%20Krishnan%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3ETabu%2C%20Kareena%20Kapoor%20Khan%2C%20Kriti%20Sanon%26nbsp%3B%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203.5%2F5%3C%2Fp%3E%0A
Evacuations to France hit by controversy
- Over 500 Gazans have been evacuated to France since November 2023
- Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
- The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
- Artists and researchers fall under a programme called Pause that began in 2017
- It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
- Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
- Unlike students, they are allowed to bring their families to France
Mohammed bin Zayed Majlis
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
Moral education needed in a 'rapidly changing world'
Moral education lessons for young people is needed in a rapidly changing world, the head of the programme said.
Alanood Al Kaabi, head of programmes at the Education Affairs Office of the Crown Price Court - Abu Dhabi, said: "The Crown Price Court is fully behind this initiative and have already seen the curriculum succeed in empowering young people and providing them with the necessary tools to succeed in building the future of the nation at all levels.
"Moral education touches on every aspect and subject that children engage in.
"It is not just limited to science or maths but it is involved in all subjects and it is helping children to adapt to integral moral practises.
"The moral education programme has been designed to develop children holistically in a world being rapidly transformed by technology and globalisation."
Killing of Qassem Suleimani
