Sunak urges rich to give £400 to charity as he defends giving second-home owners payout

27 May 2022, 09:27 | Updated: 27 May 2022, 18:45

Rishi Sunak has urged wealthy individuals to donate their £400 energy rebate to charity.
Rishi Sunak has urged wealthy individuals to donate their £400 energy rebate to charity. Picture: Alamy

By Sophie Barnett

Rishi Sunak has pledged to give his £400 energy rebate to charity as he defended his controversial decision to give even the richest households the payout.

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The Chancellor, who has been slammed by some Tory MPs for "throwing red meat to socialists", said other rich individuals who do not need financial assistance from the Government should donate the £400 to charity.

Mr Sunak announced plans to give every household in Britain £400 off their energy bills to help ease the cost of living crisis on Thursday.

He doubled the planned £200 universal rebate to £400 and converted it from a loan to a grant as part of a £15bn package to help Britons weather the cost-of-living crisis.

He also revealed plans to introduce a temporary 25 per cent windfall tax on oil and gas companies in a major Tory U-turn to fund the grants.

Read more: Windfall tax on energy firms explained: How do I get Rishi Sunak's new £400 discount?

Read more: Sunak gives every household £400 off energy bills after windfall tax U-turn

Mr Sunak told the Commons he had considered an alternative of a targeted council tax rebate but it was felt this could see people who live in high-value homes but who still need financial support losing out.

He said if wealthy people can do without the Government handout then they should give it to charity - something he said he will be doing.

“So actually this being universal means that we avoid all of those problems and really do get help to everyone who needs it and you, like me, I am sure like me, you can also give that money to charity if you don’t need it," he told Sky News.

The Chancellor, whose wealth is listed as £730m, has been criticised for his decision to give every household the payout.

His universal rebate will go to millions of people who are not facing a financial squeeze - and second home owners will receive a double payment.

Read more: Former CBI chief: Rishi’s £400 for bills is the 'right thing' in a perfect economic storm

Read more: 'Relieved' energy boss hails Rishi Sunak's £15bn living cost package as a lifesaver

The cash is being paid via a reduction in energy bills over six months from October, meaning those who own more than one home will receive multiple payments - one for each property.

Speaking in Durham earlier, the Prime Minister defended the Chancellor's decision to give the £400 to all households, saying it is the "right thing to do".

He claimed the scheme, which he describes as a "big bazooka" of support, is a "massively redistributed policy" and will help those who need it most.

Unlike Mr Sunak, the Prime Minister suggested he won't be receiving the £400 grant as his "arrangements are different" - due to him living in No10 Downing - a Government owned flat.

Mr Johnson said the country is dealing with the "aftershocks of Covid and spiking energy prices" but we are "going to get through it".

"We will come out much stronger the other side," he told reporters.

He also denied the extra help will lead to a rise in inflation.

Labour has criticised the Chancellor's package and said it is "not right" that those who own a second or third home will get more than one payout.

"You can now get a situation where somebody who's incredibly wealthy gets £400 on three or four occasions because they own so many properties," Labour's Shadow Chancellor Rachel Reeves said.

"This is only happening because this package has been rushed through because the Government has been resisting this."

Mr Sunak defended his decision, saying: "Second homes account for one or two per cent of the property stock."

Read more: Marr: Sunak threw the kitchen sink at the cost-of-living crisis but it comes at a cost

Rishi Sunak has vowed to give his £400 payout to charity.
Rishi Sunak has vowed to give his £400 payout to charity. Picture: Alamy

The Chancellor has been accused of being "out of touch" and failing to do enough to help struggling Brits, after he entered The Sunday Times Rich List with his wife for the first time.

Along with Akshata Murty, his wealth is listed as £730m and he reportedly owns three homes in the UK - meaning he could receive £1200 from his scheme.

Besides doubling the £200 loan and turning it into a grant and the U-turn on the windfall tax, a one-off grant of £650 will also be made to eight million households that are most vulnerable to the cost of living squeeze.

Pensioners will get a one time £300 payment and disabled people will get £150.

But the announcement, which has been welcomed broadly by economists, was met with fury from Tories who say the U-turn is "not the Conservative way", with one accusing him of "throwing red meat to socialists".

Speaking in the House of Commons, Tory MP Richard Drax lashed out saying: "Can I warn my right honourable friend that by throwing red meat to socialists, by raising taxes on businesses and telling them where to invest their money is not the conservative way of encouraging those who create prosperity and jobs to do just that.

"And does he agree with me that by setting this bar, we are in danger of aligning with socialists to raise it, which they would do with relish again and again and again?"

Sir Bob Neill submitted a vote of no confidence in the PM today explaining in a statement: "Since the start of this episode, I have been very clear that I would wait for the conclusion of any police investigation and the publication of Sue Gray’s full report before making a judgement. My years as a lawyer have taught me not to come to conclusions without the fullest possible evidence.

"I have been equally clear that we cannot have one rule for those working in government and a different one for everyone else. Those of us who set the rules have a particular responsibility to stick to them ourselves.

"Sue Gray’s report has highlighted a pattern of wholly unacceptable behaviour, spread over a number of months, by some working in 10 Downing Street, including breaking rules that caused real pain and hardship for many, and which the Government, and we as parliamentarians, were telling others to live by.

"I have listened carefully to the explanations the Prime Minister has given, in Parliament and elsewhere, and, regrettably, do not find his assertions to be credible. That is why, with a heavy heart, I submitted a letter of no confidence to Sir Graham Brady on Wednesday afternoon.

"Trust is the most important commodity in politics, but these events have undermined trust in not just the office of the Prime Minister, but in the political process itself. To rebuild that trust and move on, a change in leadership is required."

The Chancellor said the levy follows in the footsteps of previous Conservative governments - including Margaret Thatcher's - but IFS director Paul Johnson tweeted: "Big, expensive package from Rishi Sunak.

"Disappointing to hear the Chancellor again conclude by claiming to be cutting taxes. He emphatically is not. He is raising them, and to historically high levels.

"I think that is the right thing to do, but his tax plan is to raise taxes not, as he keeps saying, to cut them.

"In conjunction with tax rises already in place this is hugely redistributive – taking from high earners and giving to the poor.

"Promise to increase benefits and pensions by September inflation next April. Likely to be 10 per cent or more. As expected. Big cash increase in spending."

Full list of Tory MP's who have called on Boris Johnson to resign:

  • Paul Homes
  • Angela Richardson
  • Craig Whittaker
  • David Davis
  • Neil Hudson
  • Bob Neill
  • Stephen Hammond
  • Julian Sturdy
  • David Simmonds
  • Caroline Nokes
  • Andrew Mitchell
  • Nigel Mills
  • Tim Loughton
  • Mark Harper
  • Nick Gibb
  • Karen Bradley
  • Aaron Bell
  • John Baron
  • Steve Baker
  • Roger Gale
  • Peter Aldous
  • Tobias Ellwood
  • Anthony Mangnall
  • Gary Streeter
  • William Wragg