‘I cannot magic away cost of living crisis’ – Johnson
BORIS JOHNSON said he cannot “magic away” all the soaring food and energy expenses as he comes under increasing pressure to alleviate the cost-of-living crisis.
Instead the Prime Minister vowed yesterday to use the “firepower” of government to “put our arms around people” as it did during the coronavirus pandemic.
One measure he is facing calls to implement is a windfall tax on the soaring profits of oil and gas giants to fund a fresh support package or reduce consumer bills.
But Jacob Rees-Mogg set out fresh opposition from within the Cabinet as he argued it is wrong to raid the “honey pot of business”.
The Brexit opportunities minister said the one-off measure on North Sea firms would ultimately see the public pay more tax.
Mr Johnson has not ruled out the move, instead urging firms to invest their soaring profits, and Downing Street hinted a decision would be coming “soon”.
During a visit to Hilltop Honey’s factory in Newtown, Powys, Mr Johnson told reporters: “I’m not going to pretend to you that we can magic away every single expense that people are going to face as a result of a global spike in energy prices.
“But be in no doubt that this will come down, we will get people through it. We will use the firepower we have built up to put our arms
around people, just as we did during the pandemic.”
Labour leader Sir Keir Starmer argues a Government U-turn on opposition to a windfall tax is “inevitable” as it would “raise billions of pounds, cutting energy bills across the country”.
But Mr Rees-Mogg told reporters: “Retrospective taxation is difficult because you are changing the understanding of what people do when they invest.
“It’s difficult because tax on corporations ultimately falls on individuals anyway, it either falls on individuals because the companies to maintain their net margin around the world increase their pricing in the UK. Or it falls on individuals because the profit doesn’t fall through to the dividends that fund their pensions. So I think the idea of a windfall tax as a panacea to the inflation problem is wrong.”
Pressed if he would say never to such a tax, Mr Rees-Mogg said: “I’m not commenting on what the Chancellor will do, that’s a matter for him and his budget.
“I’m merely saying there is this honey pot of business you can just raid whenever you feel like is not true.”
Mr Rees-Mogg, who also holds the brief of Government efficiency minister, added: “All taxation ultimately falls on individuals so when you’re calling for a windfall tax you’re saying you want to pay more tax.”
The idea of a windfall tax has gained popularity because energy firms are seeing soaring profits due to of rising consumer prices, as fuelled by the pandemic and the war in Ukraine.
Chancellor Rishi Sunak has not ruled out imposing the measure, and has said “no option is off the table” if companies do not increase their investment “soon”.
Downing Street said yesterday that ministers “haven’t put a timeline” on when firms must change their profits into spending, but reiterated a decision would come “soon”.
Labour has argued 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.
Offshore Energies UK, the energy industry’s trade body, has said the tax would put investment and jobs at risk.
It said the Treasury will get £8bn from the sector and another £5bn next year, which is on top of £370bn which has been paid over the past decade.
OEUK chief executive Deirdre Michie told Times Radio: “The point is that the tax regime is working.
“The Government can use those monies to spend on helping consumers. We recognise the crisis is a massive and significant one which does need addressing.”
She added: “We need these companies to keep investing in oil and gas
for security of energy supply but we also need them to invest in the energy transition. We have identified up to £250bn of investment opportunity over all of the energies but only a third of that is sanctioned, so that if people start to feel this is not a good place in which to invest they will take their investment elsewhere.”
Many operators, other than BP, in the North Sea are “really worried” that a windfall tax could impact their investments, according to the head of the body which represents the UK offshore oil and gas industry.
A stable and predictable tax regime is needed to help confidence and many operators, other than BP, in the North Sea are “really worried” that a change could impact their investments or hit the supply chain, according to Ms Michie.
She told the programme: “They are really concerned that if an investment from the operators starts to step away it will undermine the projects they are hoping to come through and that is where the jobs start to go.
“It is the supply chain that has the jobs.
“It also has the expertise and the skills that are going to underpin the energy transition.
“We should be in no doubt that it is the whole gas companies their supply chain that is going to drive the energy transition forward.”
It came as Rishi Sunak and wife Akshata Murty entered The Sunday Times Rich List for the first time with their joint £730m fortune.
Their listing among the nation’s wealthy elite also comes after their finances came under intense scrutiny when it emerged Ms Murty holds non-domiciled status allowing her to reduce her UK tax bill.
Mr Sunak had been seen as a frontrunner in any leadership contest to replace Boris Johnson but his standing was severely dented by the scrutiny of his family’s exorbitant wealth.
The entry into the Rich List will do little to quell allegations he does not understand the pain being suffered by the public, especially the nation’s poorest, as food and energy prices soar with inflation hitting a 40-year high.
It was estimated Ms Murty’s nondom status could have saved her £20m in taxes on dividends from her shares in Infosys, an Indian IT company founded by her father.
She later agreed to pay UK taxes on her worldwide income.
Deputy prime minister Dominic Raab told Times Radio: “Rishi Sunak is a fantastic example of someone who’s been successful in business who’s come in to make a big impact in public service. I think we want more of those people. I think it’s fantastic that you’ve got someone of British Indian origin, showing all people in our country that you can get to the top of politics.”
BORIS Johnson has insisted he will not seek to block names appearing in the Sue Gray inquiry report into partygate and said he is “looking forward” to seeing its contents “pretty soon”.
The Prime Minister said he was “very grateful” for the Metropolitan Police’s investigation, which concluded with 126 fines for lockdown breaches in Downing Street and Whitehall.
There were demands for answers over how Mr Johnson escaped with just one fixed-penalty notice (FPN) despite being believed to have been present at multiple rule-breaking events.
Potentially damaging further details, including the names of some of those who attended gatherings, will be published in the report from senior civil servant Ms Gray.
Sources close to the investigation expect it will be published early next week, with individuals whose involvement will be mentioned to be contacted over the weekend.
Mr Johnson declined to apologise again for the rule-breaking in No.10 during a visit to Hilltop Honey’s factory in Newtown, Powys, yesterday.
Instead, he said: “I’m very grateful to the Met for their work, I’m thankful for everything they’ve done. We just need to wait for Sue Gray to report, fingers crossed that will be very soon, and I’ll be saying some more next week.”
Asked if No.10 would be blocking any names from appearing, he said: “That will be entirely up to Sue Gray and I’ll be looking forward very much to seeing what she has to say, and fingers crossed that will be pretty soon next week.”
Officials impacted by the Gray inquiry, including those to be named, are being written to so they can have a chance to respond before the current draft is finalised for publication.
Mr Johnson is among those who will receive a letter from the Cabinet Office team, but No.10 sources declined to say whether or not it has been received.
The investigators are understood not to be including the full details of the allegations in the letters, but instead are giving a “gist” of the relevant sections to those being contacted.
There were calls for Scotland Yard to explain how Mr Johnson received just the one fine, for his 56th birthday gathering in June 2020 when indoor mixing was banned.
Former director of public prosecutions Lord Ken Macdonald warned “it’s very difficult for us to disentangle exactly how the police investigation has proceeded and how fair it’s been”.
He told BBC Radio 4’s Today programme: “I think without the police providing an explanation for that it’s very difficult for us to understand why they came to the conclusions that they did.”
The crossbench peer said it was not known why the Prime Minister was fined for his presence at what was deemed one of the less serious events but not others.
There has also been no explanation as to why Cabinet Secretary Simon Case, who had to recuse himself from running the civil service inquiry after reports of a Cabinet Office Christmas party surfaced, has not been fined.
“This was a major scandal at the heart of government, at the heart of the civil service, and we remain very much in the dark about who was involved, who organised the parties, and who was responsible,” Lord Macdonald, who led the Crown Prosecution Service between 2003-2008, said.
“Of course, the Prime Minister and the head of the civil service are ultimately responsible, but there plainly were other people as well who were involved in this and we simply don’t know who they are, and I think that’s not good enough.”
Closing its investigation on Thursday, Scotland Yard said a total of 83 people had received at least one fine each for attending events over eight separate days.
One source close to the Gray investigation said the inquiry could be published as soon as Monday, but it was thought Tuesday or Wednesday were more likely. But ultimately its publication is being handled by No.10. The Metropolitan Police declined to identify anyone in its £460,000 investigation.