Sunak to bring in windfall tax as Brits hit with 'extraordinary' bill increase
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Rishi Sunak has been pushed to introduce an emergency windfall tax against energy companies in order to ease the cost of living crisis across the UK. The Chancellor has so far withheld the introduction of additional tax measures against energy giants as he argues a windfall tax would stifle investment in domestic energy infrastructure. Economist and political theorist Michael Jacobs declared a windfall tax against energy companies was an ‘inevitable’ economic measure that the Conservative Government will be forced to instigate.
Speaking to LBC, the professor said: “I think a windfall tax is pretty much inevitable now, I have to say, I’ve thought that for a while.”
In conversation with Nick Ferrari, Mr Jacobs outlined the urgent need for a windfall tax in order to ease the renewed financial burden on households across the nation.
He said: “Simply, because of the pressure on the Government to provide more help to consumers facing these extraordinary energy bills.
“Of course, we’ve not yet seen the last of them – we saw energy bills rise by over 50 percent, as you’ve just been reminding us, in April and in October they’re going to go up again.
“Of course, that’s the moment when heating bills start, heating starts going back on.”
Mr Jacobs warned the cost of living crisis would worsen again later in the year as energy prices continue to soar as the winter approaches.
The politics professor highlighted the pressure on the Tory Government to introduce financial measures in support of struggling families.
He said: “The pressure is huge and, frankly, if the government needs a bit more money to do this, there is such a simple mechanism that it has to do this which even the Conservative party is warming to.
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“It is a windfall tax on the very companies that we are paying all this money to.”
Mr Jacobs suggested a windfall tax would provide the vital economic resources needed to assist the most vulnerable households in coping with the cost of living crisis.
Moreover, he suggested the public would support a windfall tax on the energy companies that have, so far, enjoyed enormous profits from the rapid increase in energy costs.
He added: “People are wondering, where is my money going when I’m paying these huge energy bills?
“It is literally to those oil and gas companies, in their massive profits.”
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The Chancellor has not ruled out enforcing a windfall tax on energy giants but has so far avoided the measure.
Mr Sunak suggested an increased tax on energy companies could prevent the reinvestment of their profits into domestic energy infrastructure across the UK.
He has argued this investment is highly valuable as domestic energy production and storage would protect the uK from future fluctuations in the global energy market.
CEO of BP Bernard Looney echoed the suggestions of the Chancellor as he said: “By definition, windfall taxes are unpredictable and could challenge investment in homegrown energy.”
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