Millions of households will receive a £400 discount off their energy bills and a £5 billion tax will be levied on oil and gas giants as Rishi Sunak moved to counter the soaring cost of living.

The Chancellor was forced to unveil emergency measures as part of a £15 billion package to tackle the impact of soaring inflation, which has reached a 40-year high.

As well as the universal payment there was targeted support for the poorest, the elderly and the disabled.

The Chancellor acknowledged that high inflation is causing “acute distress” for people in the country, telling MPs: “I know they are worried, I know people are struggling.”

He said the Government “will not sit idly by while there is a risk that some in our country might be set so far back they might never recover”.

The £400 in universal support from October replaces the initial plan for a £200 loan, with Mr Sunak scrapping the requirement to repay the money.