The Chancellor has announced the introduction of a temporary, targeted, Energy Profits Levy.
The new Levy will be charged on profits of oil and gas companies at a rate of 25%. It will be temporary, and when oil and gas prices return to historically more normal levels, the Levy will be phased out – and with a sunset clause written into the legislation.
The levy raises around £5bn revenue over the next year to help families with the cost of living. The government will use this to make the following payments:
- A one-off Cost of Living Payment of £650, in 2 payments, one in July and one in Autumn
- From the autumn, over eight million pensioner households who receive the Winter Fuel Payment will receive an extra, one-off Pensioner Cost of Living Payment of £300.
- The 6 million people who receive non-means tested disability benefits, from September will receive a one-off Disability Cost of Living Payment, worth £150.
- Al households will receive £400 support for household energy bills as a grant from October. This replaces the repayable £200 off energy bills originally proposed.