A windfall tax on energy firms to help support people suffering the most with the cost of living crisis could be announced by the Government this week, it has been reported. It comes as Prime Minister Boris Johnson faces more damaging revelations from the Sue Gray report into partygate due to be published today (Wednesday).
Chancellor Rishi Sunak is widely reported to be meeting with Prime Minister Boris Johnson on Wednesday to “sign off” on a “multibillion-pound” plan, with Thursday being the suggested date for an announcement. Mr Sunak is reported to have come to the conclusion that it is justified to impose a one-off windfall tax on oil and gas companies, the Telegraph reports, as some have seen profits double.
The paper reports that the tax could be linked to the amount of investment each company delivers. The Treasury is reportedly finalising plans for the tax, an idea which has been put forward by the Labour Party.
Government sources told the PA news agency that no decisions on measures to help in the cost of living crisis have been made yet and the timing is yet to be confirmed.
Government moves come after 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. He said this was due to the market coping with “once-in-a-generation” price changes “not seen since the oil crisis of the 1970s”.
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. The announcement is also reported to be going ahead as a way to take some of the heat off the Government following the publication of Ms Gray’s full report into partygate, which is expected on Wednesday.
But a Downing Street spokesman told the BBC he would “refute any suggestion” an announcement would be timed to distract from the report. 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 Chancellor has been clear that as the situation evolves, our response will evolve – and we stand ready to do more.”
