Yahoo Finance Minister opens door to windfall tax on energy companies
A minister has opened the door to a windfall tax on energy companies to help fund further support for struggling families facing a cost of living crisis.
Policing minister Kit Malthouse said on Thursday morning that while he was “intrinsically opposed” to retrospective taxes “there are Conservative administrations in the past who have felt the need to tax retrospectively and sometimes the circumstances might warrant that.”
Chancellor Rishi Sunak is coming under growing pressure to impose a one-off levy on the energy giants who have seen their profits soar as gas prices rise, pushing up energy bills for millions of people.
In a speech to business leaders on Wednesday night Mr Sunak warned the “next few months will be tough” and said that while no measure any government could take “can make these global forces disappear overnight” that ministers stood ready to act.
The Chancellor is reportedly considering a range of measures to help ease the squeeze on living standards after inflation rose to 9 per cent in April - it’s highest level for 40 years.
These are said to include an increase in the warm homes discount, tax cuts and more targeted support for the poorest families.
On the idea of a windfall tax the Chancellor has previously said unless energy giants increase investment in the UK he will hit them with a levy.
Asked if a windfall tax was “ideologically unconservative”, Mr Malthouse said on Times Radio: “We are intrinsically opposed to that kind of taxation. We want to see a pattern of investment from that industry that will help us with our medium and long term energy problems.
“The Chancellor reserves the right to take all steps he deems necessary and he is in conversation with that industry all the time I am sure.”
Earlier this week Conservative MPs voted down a Labour motion on whether to impose a windfall tax.
But while some Tory MPs like Robert Halfon and Mel Stride are now backing a windfall tax, others believe Mr Sunak has other options.
Former Conservative minister John Redwood tweeted: “The Treasury is raking in extra taxes on dear energy. Instead of wanting another tax on energy he needs to give us back some of the current energy taxes rip off.
“Raise Universal credit, cancel the National insurance rise, suspend VAT on fuel, end the threat of higher business taxes, cut Council tax. These are necessary to ease the squeeze and to stop future job losses.
“The Treasury needs to take urgent action to return some of the huge windfall tax it is getting from business and all of us from energy taxes. Vat on fuel bills, double tax on UK oil and gas, rip offs at the pumps are coining it in so the Treasury flirts with more taxes!”
