Labour has called for a windfall tax on North Sea Oil and Gas companies to help fund measures to protect households from expected energy bill increases in April.
Oil refinery plant at night
With gas prices throughout Europe going up exponentially in 2021 and remaining high into 2022, the price cap is expected to increase dramatically when it is reset in April. Research from Cornwall Insight suggested it could rise by approximately 46% to £1,865 for example.
As such, those in government and the energy sector have been evaluating pathways to protect consumers, with increasing calls for action.
A windfall tax would help address the immediate crisis, the Labour party has now argued, allowing fully-funded support for the squeezed middle, pensioners and the lowest earners. These groups could receive up to £600 off bills, as well as the tax helping to long term measures to keep energy bills lower in the future.
The opposition party said it would use the one-off tax to reduce Britain’s reliance on imported gas by accelerating home-grown renewables and new nuclear, to rollout retrofit measures for 19 million homes that could save households on average £400 a year on bills and regulate the market better to help prevent the supplier failures seen over the last year.
“There is a global gas price crisis, but 10 years of the Conservatives’ failed energy policy, and dither and delay has created a price crisis that’s being felt by everyone,” said Rachel Reeves MP, Labour’s shadow chancellor of the Exchequer.
“That’s why Labour would give families security by taking fully-funded measures to save most households around £200 or more, targeting extra support on top of that for the squeezed middle, pensioners, and lowest earners.”
The call for a tax follows Labour calling for changes to VAT to help reduce the impact of surging prices earlier this month.
Read more: Current+
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