The Labour party has urged the government to introduce a windfall tax on North Sea oil and gas companies, which it says could shave £200 off the average household energy bill.
Labour made the call as part of a raft of proposals, which also includes a £600 million package to support energy intensive industries and struggling businesses in the sector, which would be financed by the windfall tax.
A significant hike in wholesale gas prices has seen energy bills for households and businesses increase sharply over recent months. Figures issued by the Office for National Statistics indicate that 12 per cent of businesses had seen either production, supply or both affected by the price rises, while Labour suggested that one in four businesses had been affected in some way following its own study.
While ministers have said that they are listening to households and businesses and have introduced measures to help, shadow business secretary Jonathan Reynolds has warned that more “viable firms” could go out of business as a result of “government failures over the last decade”.
Reynolds said: “The government has been asleep at the wheel, with British firms, especially those energy-intensive businesses, paying the price.”
The government has said in its own statement that the current cap on energy prices was “insulating millions of consumers from high global gas prices” and that it would “continue to listen to consumers and businesses on how to manage the costs of energy”.
Yet, Labour has announced that it will look to trigger a vote in Parliament on its proposals this week, with MPs to debate calls to scrap business rates, introduce the windfall tax and set-up the £600 million contingency fund for businesses.
The measures are likely to receive the support of the Liberal Democrats, who have also called for such a tax to be introduced for energy firms.
Labour has suggested its plans would support households ahead of a further rise in energy bills in April, when the energy price cap referenced in the government’s statement is to be heightened and household finances are left worse off when the new National Insurance rate comes into force.
Trade association Energy UK has indicated that bills will rise by up to 50 per cent, with average households potentially paying out a further £700 per year.
Meanwhile, what is being called a “cost-of-living” crisis is being exacerbated by UK inflation, which reached a ten-year high back in November and is likely to rise further in the coming months.
Photo by Mykola Makhlai on Unsplash
