Sunday, June 26, 2022

No. 10 warned that the long-term damage from not enacting a windfall tax could be worse than the consequences of an about-face

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There is concern that the blame for rising inflation and worsening the cost-of-living crisis is shifting to the government

As the Prime Minister weighs whether to plunder profits from oil and gas companies, No10 was told short-term pain unleashed by an about-face would be forgotten by voters, but failure to collect the levy could do longer-term damage. said a senior Tory source.

The long-term political ramifications of not imposing a windfall tax on energy giants could be worse than the consequences of a potential U-turn, Boris Johnson has warned.

There is concern within the party that the blame for rising inflation and worsening the cost-of-living crisis from the Covid-19 pandemic and the war in Ukraine is being shifted to the government. I understands.

And some Tories believe the government is now likely to introduce a windfall tax on energy giants, with profits going to help struggling households, although Mr Johnson said he didn’t think the levy was “the right thing to do”.

Chancellor Rishi Sunak has kept the door open to introducing the one-off levy, threatening oil and gas giants he would consider it unless they increase investment in jobs and energy security.

However, some ministers are “actually against it,” said a senior government official. However, No 10 insisted that the Prime Minister and Chancellor “are in line” on the issue.

“You’ve heard both say virtually the same thing when it comes to these types of taxes,” the spokesman said.

“We want to see significant investment from these types of companies in UK jobs to boost the economy and secure our energy supply for the long term. We believe that investing is the right thing to do first and foremost.”

Meanwhile, Mr Johnson has been pressured by ex-politicians and advisers to roll back his tax and welfare policies.

Former racial adviser Samuel Kasumu has called for a reversal of the increase in Social Security and a £20-a-week cut in the universal credit increase in a new Commons report published on Friday.

And ex-Tory Chancellor Norman Lamont has urged ministers to reintroduce the across-the-board credit increase temporarily introduced during the Covid-19 pandemic, saying it is “clear another package will be needed”.

He told BBC Radio 4 world one: “The top priority must be to help the most vulnerable, those who are struggling to feed themselves, to heat their homes, you hear the heartbreaking stories daily.”

He added: “I think they should do something for the universal credit, maybe restore the temporary increase which was then withdrawn, also act on the warm house rebate and expand its scope.”

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