Truss vows to continue to take fight to Putin
Leadership hopeful bats away plans to put pressure on power firms despite raking in record profits
Liz Truss last night branded herself a “freedom fighter” on Ukraine as she told Tory members they could trust her to do all she could to defeat Vladimir Putin. Writing in The Daily
Telegraph, the Foreign Secretary said she would make President Zelensky the first foreign leader she called – and pledged to follow in Boris Johnson’s footsteps and be Kyiv’s “greatest friend”. She said she would urge G7 nations to provide more lethal and humanitarian aid to Ukraine.
LIZ TRUSS has insisted she is against further windfall taxes after two of Britain’s biggest energy companies posted record profits on the back of surging power and gas prices.
The Foreign Secretary said it was “not time for another windfall tax” after Shell and British Gas owner Centrica announced billions of pounds in profit even as their UK household energy customers face record bills.
The leadership candidates are under growing pressure to set out how they will ease the cost of living crisis as annual energy bills are predicted to climb above £3,000 when the price cap is reset in October – up from £1,277 last October.
Dame Sharon White, chairman of John Lewis Partnership, urged the Tory leadership candidates to focus on the incoming “tsunami of rising energy bills”. She said the estimates that fuel bills will rise by £2,300 on average this winter were “frankly terrifying”.
In a Linkedin post, she said: “Most people simply won’t be able to cope. The average cash in the bank people have to draw on for a rainy day is £500.
“The leadership contest for the prime minister so far [has been] dominated by tax cuts. [It] has to urgently focus on the coming tsunami of rising energy bills.”
Centrica and Shell’s profits were boosted by the soaring wholesale prices for the energy they produce as Russia’s war on Ukraine squeezes international markets.
As well as owning British Gas, Centrica also has a 20 per cent stake in Britain’s nuclear power fleet and it produces oil and gas from the North Sea.
The company recorded an increase in operating profits to £1.3billion for the first six months of the year – up from £262million a year earlier.
At Shell profits hit an all-time high of £9.5billion in the second quarter.
Centrica yesterday reinstated its dividends after cancelling them during the pandemic. It will pay out about 1p per share to investors, totalling £59million.
Chris O’shea, Centrica’s chief executive, defended the payout, arguing shareholders were “ordinary people feeling the cost of living crisis as well”.
He added: “Ultimately it’s the responsibility of a strong company to be an investable company.
“I know it’s very difficult to see the words ‘profits’ or ‘dividends’ when people are having a tough time right now; I am very conscious of this.”
Mr O’shea earned £765,000 last year, waiving his potential annual bonus of £1.1million as household bills climbed. Shell boss Ben van Buerden earned £6.7 million in 2021.
With wholesale energy prices high since last summer, Mr Sunak broke with Tory convention in May to announce a windfall tax on North Sea oil and gas producers, increasing the tax rate from 40 per cent to 65 per cent for the likes of BP, Shell and Centrica.
The levy was passed into law this month and applies to profits from May 26, 2022. It will be in place until the end of 2025 unless energy prices come down to more “normal” levels before then. The measure is expected to raise £5billion to help fund a £15billion package of support for struggling households.
Yesterday morning Martin Lewis, founder of the Money Saving Expert website, demanded that Boris Johnson, Rishi Sunak and Ms Truss sit down together and thrash out a plan to help consumers.
He said the “zombie government”
‘The leadership contest has to urgently focus on the coming tsunami of rising energy bills’
must not wait until the conclusion of the Tory leadership contest to decide on help for households. Despite these calls, Ms Truss insisted it was “not time for another windfall tax”, indicating it would deter investment.
Speaking at hustings in Leeds, she said: “What I believe is we need to keep taxes low to attract investment into industries. We need to turbocharge investment in the North of England, bringing more businesses and opportunities. The best way to do that is to keep taxes low and attract that investment into our great towns and cities, and that’s what I’m focused on.”
Asked how she would help people pay their bills this winter if she became Conservative Party leader, she said: “I understand that families are really struggling at this time, we’ve seen a rise in global energy prices.
“That’s why I would reverse the National Insurance increase, putting more money back into people’s pockets. We’ll also have a temporary moratorium on the green levy, to cut people’s energy bills.
“What we also need to do is make sure we produce more domestically produced gas, so that we are able to increase supply and keep prices as low as possible, and that’s really important as we head to net zero, using gas for our transition.”
Centrica said it expected to pay about £600million in extra UK taxes
‘This is not the time for another windfall tax’
over the next couple of years as a result of the windfall tax. However, operating profits at British Gas fell 43 per cent to £98million as the cost of the energy it bought to supply to customers rose.
Mr O’shea said: “When the price of something goes up you would expect to see consumption come down, and we think that is one of a number of things customers can do to manage their bills as they go forward.” Asked to justify Shell’s record-breaking quarterly profit Mr van Beurden said: “Of course, I’m very aware of the difficulties and the hardship that may well come.
“I’m also very much aware of the difficulty to explain how this is actually a global problem and a problem that has come about by policy decisions that have been taken. It’s fair to say that the industry has significantly under invested collectively.
“If… at the same time, there have been insufficient policies to deal with the demand of oil and gas, we of course get the tightness that we get.”
He said the company was working very hard to bring on new supplies but “cannot perform miracles”.