As pressure mounts to slap a windfall tax on oil and gas companies, Boris Johnson says “no option is off the table” to combat growing living costs.
According to opposition parties’ proposals, a one-time fee on corporate profits would be imposed, with funds going to help hard-hit people facing skyrocketing expenses.
Labour leader Sir Keir Starmer said a windfall tax was “staring the prime minister in the face” as part of the solution to the rising cost of living.
A windfall tax is a one-time tax levied by the government on a company or group of corporations to identify companies that have benefited from something they were not responsible for—in other words, a windfall.
Labour, the Liberal Democrats, and the Scottish National Party have all called for a tax on oil and gas companies, which have enjoyed record profits since the pandemic ended.
The parties said the funds might be used to help those who are most affected by the rising cost of living, which has seen food, fuel, and energy prices skyrocket, as well as inflation, reach a 40-year high.
The government initially opposed the plan, claiming that it would discourage energy corporations from investing in the UK.
However, as costs climb and another energy price hike looms in the autumn, Downing Street’s rhetoric has softened, with both the prime minister and chancellor leaving the proposal on the table.
Former Treasury minister Jesse Norman told Today that a windfall tax was needed in these “exceptional times.” Several Conservative backbenchers have also come out in favour of a windfall tax, increasing pressure on the government to act.
Bernard Jenkin, a senior Conservative backbencher, went even further, calling for a £13.5 billion package of aid to help people cope with the cost of living crisis, including reviving the £20 per week increase in universal credit that was implemented during the epidemic.
Mr Clarke, a Treasury minister, claimed the government had already taken “decisive action” on universal credit by adjusting the taper rate, which is the amount workers lose as they earn more money.