This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.bbc.co.uk/news/business-61584546

The article has changed 16 times. There is an RSS feed of changes available.

Version 6 Version 7
UK energy bills to be cut by hundreds as part of £10bn support package UK energy bills to be cut by hundreds as part of £10bn support package
(about 3 hours later)
UK households are set to have hundreds of pounds knocked off energy bills this winter as part of a £10bn package to help people cope with soaring prices.UK households are set to have hundreds of pounds knocked off energy bills this winter as part of a £10bn package to help people cope with soaring prices.
The government had said people would get £200 off bills from October, which they would pay back over five years. The government is to scrap a plan to give people £200 off bills from October which would be repaid over five years.
However, the BBC understands that sum will be increased, possibly doubled, and will not need to be repaid. Instead, the BBC understands that sum will be increased and possibly doubled, and will not need to be paid back.
The support, to be announced by the chancellor on Thursday, is expected to be funded in part by a windfall tax.
The one-off tax on oil and gas firms, which Labour has repeatedly called for amid resistance from the government, could raise £7bn.
One-off payments to some vulnerable households and another cut in VAT on fuel could also be announced.One-off payments to some vulnerable households and another cut in VAT on fuel could also be announced.
But proposals to tax income from other electricity producers such as some older windfarms and nuclear plants which have also seen windfall gains have been shelved. The support, to be announced by Chancellor Rishi Sunak later, is expected to be largely funded by a windfall tax on oil and gas firms that could raise £7bn.
The government has come under intense pressure to act as the cost of living soars for households, but some senior members of the cabinet have been against a windfall tax on energy companies over fears it would deter them from investing in UK projects. It comes a day after Sue Gray's critical report into lockdown parties in Downing Street and follows intense pressure on the government to do more to help people with the cost of living crisis.
The package comes after Sue Gray's report into lockdown parties in Downing Street was published on Wednesday, with Prime Minister Boris Johnson keen to move on to deliver what he calls "people's priorities".
How high could my energy bills go?How high could my energy bills go?
Energy firms warn against extending windfall taxEnergy firms warn against extending windfall tax
Which countries are doing the most to tackle bills?Which countries are doing the most to tackle bills?
The Treasury said the government understood "that people are struggling with rising prices" and that Chancellor Rishi Sunak had been "clear that as the situation evolves, so will our response". Labour has repeatedly called for a windfall tax on energy companies that have made bumper profits, in large part because of Russia's invasion of Ukraine.
A spokesman added people "most vulnerable" from prices rising were the chancellor's "number one priority". But until now the government had resisted calls to impose the one-off levy, with some senior members of the cabinet arguing it could deter energy firms from investing in the UK.
In April, the government announced it would offer £150 council tax rebate to most households and knock £200 off all bills, repayable over the next five years. However, it is understood the prime minister has now sided with Mr Sunak who had been pushing for the tax.
Most people living in band A-D homes in England have now received the £150 tax rebate, but now are set to get more support in form of a grant, rather than the previously-pledged repayable loan, later in the year. But proposals to tax income from other electricity producers, such as some older windfarms and nuclear plants which have also seen windfall gains, have been shelved.
The announcement of more support comes after the UK's energy regulator Ofgem warned the typical household energy bill is set to rise by a £800 in October. And companies that increase investment in the UK could earn a discount on the additional tax.
Bills have already risen on average by £700 in April. The Treasury said the government understood "that people are struggling with rising prices" and that Mr Sunak had been "clear that as the situation evolves, so will our response".
The boss of Ofgem told MPs on Tuesday the energy price cap, which limits how much providers can raise prices, is expected to increase due to continued volatility in gas prices. The announcement of more support comes after the UK's energy regulator Ofgem warned this week that the typical household energy bill was set to rise by a £800 in October, bringing the typical household bill to £2,800 a year. Bills had already risen on average by £700 in April.
It means the typical household bill could rise by £800 per year to £2,800 and Ofgem warned 12 million households could be placed into fuel poverty. Ofgem warned it meant 12 million households could be placed into fuel poverty.
Most of the support is to be funded by a windfall tax on oil and gas companies, which has been called for by the Labour Party, but opposed by many in the Conservative government's cabinet, including Business Secretary Kwasi Kwarteng. Most people living in homes in England in council tax bands A-D have already received a £150 rebate on their bills.
It is understood the prime minister sided with Mr Sunak to support the tax on energy firms. Impact of war in Ukraine
A windfall tax is a way the government can raise money and is a type of charge which targets firms that are lucky enough to benefit from something they were not responsible for - in other words - a windfall. Energy firms have made huge profits following Russia's invasion of Ukraine.
In the case of energy companies, firms such as Shell and BP made record profits because gas and oil prices rocketed, most recently due to Russia's invasion of Ukraine.
Shell reported a record £7bn profit in the first three months of this year while BP made £5bn, the highest for 10 years.Shell reported a record £7bn profit in the first three months of this year while BP made £5bn, the highest for 10 years.
However, James Spencer, managing director of fuel consultancy Portland Analytics, warned that although oil and gas companies had made bumper profits, he didn't think they were "unfairly profiteering". But Offshore Energies UK, which represents the offshore oil and gas industry, said a windfall tax on energy firms would see higher prices and do long-term damage to the oil and gas industry.
He said the industry is "very cyclical" and companies "ride the ups and downs", adding during the pandemic, firms "didn't go to the bank with a cap in hand saying please bail us out".
Meanwhile, Offshore Energies UK, which represents the offshore oil and gas industry, warned a windfall tax on energy firms would see higher prices and do long-term damage to the oil and gas industry.
Deirdre Michie, chief executive of the body, said: "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."Deirdre Michie, chief executive of the body, said: "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."
Ms Michie said oil and gas was already the country's most highly-taxed industry, paying 40% on their offshore profits, and operators would send the Treasury £7.8bn this financial year.
Impact of war in Ukraine
Higher energy bills are pushing prices to rise at the fastest rate for 40 years, with fuel and food costs also biting into household budgets.Higher energy bills are pushing prices to rise at the fastest rate for 40 years, with fuel and food costs also biting into household budgets.
Ofgem chief executive Jonathan Brearley said that conditions in the global gas market had "worsened" following Russia's invasion of Ukraine, which has led to concerns about potential supply issues. Ofgem chief executive Jonathan Brearley said conditions in the global gas market had worsened after Russia's invasion and warned that the price cap could rise beyond £2,800 if Moscow decided to disrupt supplies.
He warned that the price cap could rise beyond £2,800 if Russia - one of the world's largest exporters of natural gas - decided to disrupt supplies.
Europe gets about 40% of its natural gas from Russia, so sudden supply cuts could have a huge economic impact.Europe gets about 40% of its natural gas from Russia, so sudden supply cuts could have a huge economic impact.
While the UK would not be directly impacted by supply disruption as it imports less than 5% of its gas from Russia, it would be affected by prices rising on global markets as demand in Europe increased. While the UK would not be directly impacted by supply disruption - as it imports less than 5% of its gas from Russia - it would be affected by prices rising on global markets as demand in Europe increased.
Mr Brearley told MPs price rises in the gas market were "a once-in-a-generation event not seen since the oil crisis of the 1970s".Mr Brearley told MPs price rises in the gas market were "a once-in-a-generation event not seen since the oil crisis of the 1970s".