Downing Street denies tax ‘rift’
DOWNING STREET yesterday denied blocking the Treasury from imposing a windfall tax on oil and gas firms, as the Chancellor faced mounting pressure to help to ease the costof-living crisis with a new package of support.
The Prime Minister’s official spokesman said he had seen “lots of reports” on division between the departments, but insisted Boris Johnson and Rishi Sunak are “aligned” on the issue.
Labour accused the Government of acting like “headless chickens” on the matter and suggested a U-turn is likely.
Wrangling has continued within the Cabinet over implementing a windfall tax on the profits of oil and gas producers which have benefited from high global prices. The money raised from such a tax could fund measures to assist with household bills.
Ministers are “intrinsically opposed” to the levy, a senior member of Mr Johnson’s Government said, although it has not been ruled out.
Asked if Number 10 is blocking the Treasury from imposing the tax, the PM’s spokesman said: “I have seen lots of reports overnight on this, but the Prime Minister and the Chancellor are aligned. You’ve heard them both say effectively the same thing when it comes to these sorts of taxes.
“We want to see significant investment by these sorts of companies into British jobs to grow the economy, to secure our energy supply for the long term. We believe investment is the right thing to do in the first instance.”
Mr Sunak appeared to acknowledge the need for further support for the poorest in a speech on Wednesday, when he said: “Right now, we have a collective responsibility to help the most vulnerable in our society”.
However, he wants to avoid inflicting further damage on the public finances, which have already been battered by the billions pumped in to the Covid-19 pandemic response, or introducing any stimulus measures which could further increase inflation. Business leaders urged him to act, with Confederation of British Industry director general Tony Danker telling BBC Radio 4’s Today programme: “You have to help the hardest-hit now.”
Figures this week showed Consumer Prices Index inflation hit 9% in April, but analysts suggested the rate for the poorest households, which spend a higher proportion of their income on food and energy, was more than 10%.
Labour has argued that a windfall tax could fund a VAT cut on energy bills and an increase in the warm home discount for those on a low income. The party’s leader, Sir Keir Starmer, told reporters in Leeds that it is a “practical step” which is “staring the Prime Minister in the face”.
“I think he’s going to U-turn on this,” he added. “By dithering and delaying he’s forcing people to struggle when they don’t need to do so.”
He said the Government are acting like “headless chickens” on the matter, sometimes ruling the levy in and sometimes ruling it out.