12 May 2022

Johnson refuses to rule out windfall tax on energy giants

12 May 2022

Boris Johnson has refused to rule out a windfall tax on the profits of energy companies to help relieve the pressure of the cost-of-living squeeze.

Chancellor Rishi Sunak has reportedly told Treasury officials to examine plans for a levy on the soaring profits of the oil and gas giants.

It follows an admission by BP chief executive Bernard Looney, who said his firm’s investment plans would not be affected by a windfall tax.

In an interview with LBC, the Prime Minister said that, while he still does not like such taxes because of the impact on investment, it is something that will have to be considered.

I don’t think they’re the right way forward

Pressed on Mr Looney’s comments, Mr Johnson said: “Well, you know, then we’ll have to look it.”

However, he added: “The disadvantage with those sorts of taxes is that they deter investment in the very things that they need to be investing in – new technology, in new energy supply.

“I don’t like them. I didn’t think they’re the right thing. I don’t think they’re the right way forward. I want those companies to make big, big investments.”

Mr Johnson will urge Cabinet members to “bring the benefits of the Queen’s Speech to life” as they meet for an away-day in Stoke-on-Trent, Staffordshire.

Downing Street said ministers will discuss how the new legislation will boost the economy, improve living standards and level up opportunities across the country.

Mr Johnson suggested that the Government will be coming forward with more assistance for hard-pressed families in July.

Downing Street was forced to deny that ministers are preparing an emergency budget to deal with the cost-of-living crisis after the Prime Minister suggested in the Queen’s Speech debate on Tuesday that there would be more help in the days to come.

There is more coming down the track. July and so on

However, in his LBC interview, Mr Johnson indicated there would be additional support over the summer rather than waiting for the Budget in the autumn to act.

“There is more coming down the track. July and so on,” he said.

“But what we will do is use all the ingenuity and compassion that we have and the fiscal firepower that we have as a result of the strong economic growth we had coming out of the pandemic.

“Our growth will return very strongly in the next couple of years.”

His comments follow the first meeting this week of the Government’s cost-of-living committee, where he instructed ministers to come forward with proposals to ease pressure on household budgets.

In a statement ahead of the Cabinet meeting, Downing Street said the Government “will continue examining what more we can do to ease the pressures on hard-working people and families” over the “coming months”.

Households face soaring energy bills, inflation is forecast to hit 10%, and welfare payments and wages are falling far behind the increase in prices.

No 10 said the Prime Minister will use Thursday’s away-day to “rally Cabinet ministers to deliver on the public’s priorities and bring the benefits of the Queen’s Speech to life”.

Separate from the Cabinet meeting, ministers are set to visit communities and businesses across the West of England, Midlands and Wales.

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