SIR Keir Starmer has called on the Prime Minister to “get rid of the loopholes in his botched windfall tax.”
The Labour leader said the allowance in Rihisi Sunak’s Energy Profits Levy for firms to reduce their payments if they invest capital in new production in the North Sea had led to oil and gas companies making huge profits and paying next to nothing to the Treasury.
He pointed to Shell, who earlier this month announced profits of $40bn in 2022, though only paid $134m of that to the UK government under the windfall tax.
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Sir Keir Starmer raised the levy during a rowdy session of Prime Minister’s Questions: “After 13 years of Tory failure, the average family in Britain will be poorer than the average family in Poland by 2030,” he said.
“That’s a shocking state of affairs. If the Tories limp on in Government we are going to see a generation of young people learning to say Auf Wiedersehen, Pet in Polish, aren’t we?” he added, referring to an 80s TV show about British construction workers forced to travel to Germany to find work.
The Prime Minister replied: “It’s clear to everyone that the biggest impact on households living standards is the energy prices that we’re suffering at the moment as a result of an illegal war in Ukraine. And I just remind the honourable gentleman what we are doing to ease people through that.
“Because of our energy price guarantee, right now, the Government is paying over half of a typical household energy bill, saving households right now £1,000. It is one of the most generous support schemes globally.”
The Prime Minister added: “But if he’s concerned about the cost of living, what he should do is stop making inflationary, unfunded spending commitments and back our plan to halve inflation.”
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Sir Keir said it was “not as complicated” as Mr Sunak claims. “Oil and gas companies are making vast, unexpected profits whilst working people face the misery of higher bills.
“He can boast all he likes but companies like Shell didn’t pay a penny in windfall tax last year and they’re still not paying their fair share now.
“Why doesn’t he admit his mistake, get rid of the loopholes in his botched windfall tax and finally choose family finances over oil profits?”
Mr Sunak replied: “He seems to forget as Chancellor I introduced a new tax on energy companies. Energy companies will pay a 75 per cent tax rate on extraordinary profits, comparable, indeed higher than other North Sea nations.
“Now that’s what his shadow levelling up secretary called for recently but I’ve got news for them, we did it a year ago, they’ve got to keep up. Now I know they claim to support levelling up but they really do need to keep up.”
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Sir Keir said the Prime Minister was in “total denial about the damage and decline that he is presiding over.”
He pointed to the 20% hike in energy bills for most households from April as the energy price guarantee cap rises from £2,500 a year for the typical property to £3,000.
“Delivering growth and tackling the cost-of-living crisis will mean standing up to vested interests. Energy bills are going to go up by £900 in April.
“He knows he’s going to have to act but who’s going to pay? Hard-working families through higher taxes and more borrowing or the oil and gas giants celebrating record profits?”
The Prime Minister replied: “I know the honourable gentleman made a rare trip out of north London to visit Davos recently. Perhaps while he was there, perhaps he missed the survey of 4,000 global CEOs from 100 different countries that ranked the United Kingdom as their number one European investment destination?
“If he’s serious about getting the economy growing then he should stand up to the vested interests in the unions and back our minimum service levels.”
Later in the session, Christine Jardine, the Edinburgh West MP also raised the rising costs on energy bills. She told the Prime Minister that a recent survey of her constituency found that 80% of those who responded would be rationing energy.
"Now, I do not represent a deprived area of the country," she added. "Almost a quarter of Scottish homes are now living fuel poverty not helped, of course, by the total absence of an insulation programme by the Scottish Government.
"So will the Prime Minister with now except that to allow the price cap to rise will only make things worse for millions of families.
"With regard to supporting people's energy bills, as I said earlier, because of the energy price guarantee, we're paying typically around half of a family's energy bill at the moment, that's worth £8,000 pounds at the moment, but the support doesn't end there, over this next year, there will be around £1,000 pounds of direct support to the most vulnerable families across the nation with their energy bills."
He agreed with the Lib Dem that home improvements for energy efficiency "should be available everywhere, including in Scotland."
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