Labour backs tougher windfall tax on energy

THE Labour Party has signalled it would bring in a tougher windfall tax on energy companies, which it claimed would raise more than £13bn and keep a lid on spiralling household bills.

In a speech at the Fabian Society Conference today, Rachel Reeves, the shadow chancellor, will say that Labour would go further on the windfall tax if it was in power “so ordinary people do not have to bear the brunt of a crisis that they did not cause”.

Labour would backdate the tax from the start of last year when oil and gas giants “were already making historically large profits”, Ms Reeves will say, in an effort to secure more to support households. Between 2022 and 2023, this tax would generate around £13bn, Labour estimates. It is understood that Labour will lay out its official policies closer to the election, and the comments are what Labour would do if it were in power now and is urging the Government to do.

Ms Reeves is expected to say that Labour would also tax oil and gas profits at the same level as Norway, which taxes North Sea oil and gas companies at a rate of 78pc. In the UK, ministers introduced a further 25pc levy last year, meaning the total rate of tax on profits is 75pc. It would also offer those living off the grid the same support as those on the grid.

Ms Reeves will say: “Millions of households are still looking to a 40pc increase in their energy bills, in April. In a week when temperatures fell below zero, I know many families and pensioners will be feeling the pressure particularly acutely. And at the same time, energy companies continue to enjoy record profits. That cannot be right.”