UK imposes windfall tax on oil and gas firms, touts help for energy bills

​​​​​​LONDON (AP) — Britain's Conservative government unveiled a 15 billion pound ($19 billion) emergency aid package Thursday to ease a severe cost-of-living squeeze, announcing the plan a day after Prime Minister Boris Johnson vowed to “move on” from a months-long scandal over government parties during COVID-19 lockdowns.

Treasury chief Rishi Sunak said the government would introduce a 25% temporary windfall tax on the profits of oil and gas firms.

The tax is expected to raise around 5 billion pounds ($6.3 billion) over the next year to help fund cash payments to help millions of people cope with sharply rising energy bills, Sunak said.

UK inflation hit 9% in April, the highest level in 40 years, and millions of customers saw their annual energy bills jump 54% the same month — amounting to an extra 700 pounds ($863) a year on average for each household.

Sunak said the government help will target the most vulnerable, including disabled people and retirees.

Some 8 million of the country's lowest-income households will receive a one-time government payment of 650 pounds ($818).

Every household will also receive a 400 pound ($503) discount on domestic energy bills in October.

The windfall tax announcement was a U-turn for Johnson's Conservative government, which had previously said that imposing one would deter investment in the UK's energy sector.

But the government is under heavy pressure to act as skyrocketing energy and food bills cause financial hardship for British households.

Sunak said the temporary levy would remain in place until “prices return to a more normal level” and would be accompanied by an “investment allowance” to motivate companies to invest in oil and gas extraction in the UK.

Follow The Gleaner on Twitter and Instagram @JamaicaGleaner and on Facebook @GleanerJamaica. Send us a message on WhatsApp at 1-876-499-0169 or email us at onlinefeedback@gleanerjm.com or editors@gleanerjm.com.