All UK household will get an energy bill discount of up to £400 and won't have to pay it back, according to reports.

Chancellor Rishi Sunak will announce a new package of support likely to include a discount on energy bills funded by a windfall tax on oil and gas giants on Thursday.

Boris Johnson will try to shift attention to the cost-of-living crisis after the Sue Gray report laid bare the raucous culture of drinking that led to lockdown breaches in Downing Street.

The Prime Minister refused to resign despite accepting the “bitter and painful” conclusions of the senior official’s inquiry that revealed lurid details of partying in Government.

He said he “overwhelmingly” believes he should stay in power to tackle the nation’s challenges including the soaring costs of food and energy.

Government sources said no decision are set in stone yet and the timing of the announcement is yet to be confirmed.

News of the new government plans came on the same day Ofgem chief executive Jonathan Brearley told MPs the regulator is expecting the energy price cap to increase by a further £830 to £2,800 in October.

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What will Rishi Sunak announce as part of cost-of-living relief package?

Reports have stated a new windfall tax on energy firms would be used to help those who are struggling – an option previously suggested by Labour and some senior Tories.

Sky News reports that Treasury Sources did not deny suggestions the requirement to pay back the £200 discount on energy bills will be scrapped and the amount could be increased.

According to reports all UK household will get an energy bill dicount of up to £400 and won't have to pay it back.

The Times said other measures which could be introduced include increases in the warm homes discount, winter fuel allowance and a cut in council tax, while a VAT cut is said to be being mooted.

Last week, Mr Sunak gave a speech at the CBI annual dinner, where he said there is a “collective responsibility to help the most vulnerable in our society”.

A Government spokesperson said: "We understand that people are struggling with rising prices, and while we can't shield everyone from the global challenges we face, we're supporting British families to navigate the months ahead with a £22 billion package of support.

"That includes saving the typical employee over £330 a year through a tax cut in July, allowing people on Universal Credit to keep more of the money they earn - benefiting over a million families by around £1,000 a year, and providing millions of households with up to £350 each to help with rising energy bills."

The spokesperson added: "The Chancellor has been clear that as the situation evolves, our response will evolve - and we stand ready to do more."

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