‘Windfall tax may be on the cards’ Boris Johnson’s ally hints at U-turn to help Britons
Treasury 'softening up' on windfall tax position says Cohen
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Treasury Minister Simon Clarke has told Sky News’s Kay Burley on Monday that the Government “can’t rule out” imposing a windfall tax on British energy companies amid pressure on Boris Johnson to act over the cost of living crisis. Mr Clarke’s words have been taken as a sign the Treasury is “softening up” over the idea of a windfall tax amid reports the Prime Minister and other Cabinet figures are “yet to be convinced” over the policy.
Political correspondent Tamara Cohen told Kay Burley on Sky News: “I think that’s the strongest hint yet we’ve had from a minister that a windfall tax, a big U-turn which would give a victory to Labour who’ve been calling for one may be on the cards.
“Simon Clarke Treasury Minister, there saying extraordinary times and extraordinary pressures on families.
“Now you see more and more Tories coming out and saying, maybe we don’t think this is very conservative, but we need to raise money somehow to help people with energy bills that are only going to go up and up and up towards the end of the year, perhaps to as much as £3000.
“Now Simon Clarke there was saying that we want the oil and gas companies to invest and if they don’t invest, then we will then impose this tax, what exactly that means, what level of investment he didn’t set out there.
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“We’ve seen some of the big oil giants already saying they’re going to, Shell has said we’re going to invest 20 to 25 billion, BP 18 billion over the next 10 years.
“These investment plans are done quite a long while in advance, the Treasury are clearly saying they want them to speed it up.
“Some companies have not announced their investment plans, so they will want to put the pressure on but exactly what threshold they’re looking at has not been made clear.
“Now, while the Treasury seems to be softening up, the Prime Minister and others in Cabinet are yet to be convinced that a windfall tax is the way forward and there’s big questions about what exactly they would spend the money on.
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“Whether you just give it to all households, lower-income households, use it for some kind of tax cut, all that is TBC.
“But I think we saw Simon Clarke they’re clearly leaning into it a lot more than we have seen over the past few.”
Pressure for a windfall tax has come from Labour but also from some senior Tories.
Conservative MP and former Treasury minister Jesse Norman, pointing out that former prime minister Margaret Thatcher used windfall taxes during her tenure in No 10, told Today: “A windfall tax justification in part rests on the widespread need that we are going to need to support people, and recognition of that.
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“And we’re going to do that, I hope, quite comprehensively, because that’s what’s going to be needed.”
Speaking to LBC about the prospect of a windfall tax, Mr Clarke said it remains an option if oil and gas companies do not invest in securing the future security of domestic energy supplies.
“The sector is realising enormous profits at the moment,” he said.
“If those profits are not directed in a way which is productive for the real economy, then clearly all options are on the table.
“And that’s what we are communicating to the sector, that we obviously want to see this investment, we need to see this investment.
“If it doesn’t happen, then we can’t rule out a windfall tax.”
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