Cost of living: Sunak grilled over delays in steps to help
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There has been growing demand for the Government to introduce a windfall tax on energy companies, including BP and Shell, as Brits are hit with soaring oil and gas prices. The Labour Party has already made calls for the tax to be implemented, following the lead of Spain and Italy, who have already announced such a tax on energy companies.
Opposition parties have argued that the money received from the levy could be put towards those who are struggling the most from the cost of living crisis.
Shadow Minister Ed Miliband told the BBC: “It’s a really important response to this cost of living crisis.”
He added: “We have a government that refuses to make the choices that we need like on the windfall tax.”
On Sky News, he added: “My message to the Chancellor is this – you’re going to do a windfall tax.
“I believe he is going to do a windfall tax because, frankly, it’s an unanswerable case.”
He added: “Get on with it and do it, and bring real help to families.”
However, Mr Kwarteng claimed the proposal was a “bad idea” and said that Tory MPs will be instructed to vote down the windfall tax proposition.
He said: “I don’t believe in windfall taxes because what you are taxing is investment in jobs, you are taxing investment in wealth creation, you’re taxing investment in new technologies such as hydrogen and carbon capture.
“We want to see more investment. We don’t want to see taxes which essentially act against any incentive to invest.”
The Business Secretary argued that the Government’s £9billion of support for families struggling with their bills, including the £150 council tax rebate, is enough assistance for now.
He also slammed Labour for calling for a windfall tax to be introduced.
The Spelthorne MP said: “I am not surprised that a Labour frontbencher is saying we should put up taxes – that’s not something that is new to me.”
However, a source from the Treasury told the BBC that the option of implementing the tax is “not off the table”.
Despite MPs initially dismissing the idea, some Ministers are reportedly warming to the proposal.
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Although Rachel Reeves, Labour’s Shadow Chancellor, has accused the Cabinet of being in “complete chaos” over whether to support the tax or not.
Mr Sunak and Boris Johnson have both suggested the Government would look at introducing the measure if energy firms decided not invest enough in new projects.
During a debate on the Queen’s Speech on Tuesday, it is expected that Labour will table an amendment for a Commons vote for or against the plan.
Mr Kwarteng highlighted that the Government always rejects amendments to the Queen’s Speech, which sets out their legislative agenda.
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