Government windfall tax U-turn inevitable, says Keir Starmer

Media caption,
The Labour leader wants to know if Boris Johnson backs his party's plan for a one-off tax on oil and gas companies.

Boris Johnson has been urged by Labour to stop dithering and impose a one-off windfall tax on energy giants' profits to tackle the cost of living crisis.

Sir Keir Starmer said that every day the PM delays his "inevitable U-turn" he was "choosing to let people struggle when they don't need to".

The PM accused the Labour leader of having a "lust to raise taxes".

But he did not rule out a windfall tax, telling MPs he would "look at all sensible measures" to help families.

The pair clashed at Prime Minister's Questions as UK inflation rose to 9%, the highest rate for 40 years, on the back of soaring energy bills.

Chancellor Rishi Sunak has repeatedly hinted at the introduction of a one-off windfall tax on oil and gas firms, who have seen a sharp rise in profits since Russia invaded Ukraine.


But there have been mixed signals from other members of the cabinet over the policy, which is backed by Labour, the SNP and Liberal Democrats.

Among Tory MPs, Conservative chair of the Treasury Committee Mel Stride has said that although he would normally oppose it, the current "extraordinary circumstances" meant there was a case for looking at "a one-off windfall tax".

At PMQs, Sir Keir said "a one-off tax on huge oil and tax profits would raise billions of pounds, cutting energy bills across the country".

He accused Mr Johnson of doing the "hokey-cokey", ruling it out one minute and backing it the next, adding: "Whilst he dithers British households are slapped with an extra £53m on their energy bills every single day.

Media caption,
Ian Blackford calls for Rishi Sunak to be sacked if he does not deliver an emergency budget

"Meanwhile, every single day North Sea oil and gas giants rake in £32m in unexpected profits.

"Doesn't he see that every single day he delays his inevitable U-turn - he's going to do it - he's choosing to let people struggle when they don't need to."

During the leaders' exchanges, one Labour frontbencher even taunted Boris Johnson, spelling out the letter 'U' with their finger, our political correspondent David Wallace Lockhart reports.

Mr Johnson said: "We're already helping people with the cost of living in any way that we can."

He added: "In July, we will have the biggest tax cut for 10 years, £330 cut on average for 30 million people who are paying National Insurance contributions and the reason we can do that is because we have a strong and robust economy.

"I'm going to look at all measures in future to support, of course I am, but the only reason we can do that, the only reason our companies are in such robust health is because of the decisions that this government has taken."

'Sack the chancellor'

But he also stressed that the Conservatives were "not in principle in favour of higher taxation", in contrast to what he said was Labour's "lust to raise taxes".

"We don't relish it, we don't want to do it, of course we don't want to do it, we believe in jobs and we believe in investment and we believe in growth," he added.

Ministers are still weighing up the idea of a windfall tax on energy companies.

The idea is a one-off levy on extra profits, which could be used to help people struggling with energy bills.

The Conservative party has been debating the merits.

And we know that because ministers and MPs have been doing it in public.

The businesses secretary told the BBC on Sunday that they're a bad idea, the prime minister agrees in principle but isn't taking it off the table, the chancellor won't rule it out and appears to be coming around to the idea, while a few Tory MPs have broken rank to back one.

Labour is absolutely convinced the government will agree in the next few weeks.

A considerable number of Conservative backbenchers now believe the same - and were less than happy at having to vote against the proposal in Parliament on Tuesday evening.

SNP Westminster leader Ian Blackford said that if Chancellor Rishi Sunak does not deliver an emergency budget to address the cost of living crisis, the prime minister should sack him.

"For weeks the prime minister has been briefing that it is the Treasury who are to blame for blocking financial support for struggling families.

"Well, prime minister, it's time to stop sniping from the side lines. If this chancellor won't deliver an emergency budget, it's time for the prime minister to sack the Treasury, to sack the chancellor, and to put somebody else in office that will act."

MPs clashed over economic growth after PMQs, on the final day of debate on the Queen's Speech.

A Labour amendment calling for an emergency budget to tackle the cost of living crisis was defeated by 312 votes to 229.

A Lib Dem amendment calling for VAT to be reduced from 20% to 17.5% was also rejected.