Rishi Sunak to announce windfall tax on energy firms
Rishi Sunak will push the button on a controversial windfall tax on energy companies on Thursday, as he lays out measures to ease the pain of rising household bills.
The chancellor has confirmed he will announce fresh support for people struggling with the cost of living crisis. The measures are expected to help the poorest households as rampant inflation pushes up the price of everything from food to fuel.
Sunak is expected to announce an increase in the warm home discount scheme, which is worth £150 to 3 million low-income households. This figure could rise to as much as £500.
The government could also bring forward a planned increase in benefits that had been expected next year. Sunak could also opt to directly fund a discount on energy bills or offer a council tax rebate.
The measures will be funded in part by a windfall tax on energy firms, after a fierce battle within the government over the policy, which has been bitterly opposed by some cabinet ministers including the business secretary, Kwasi Kwarteng. The measure could be extended to all electricity generators and may include exemptions for investments.
A senior party official admitted the decision had caused splits in the government. “The arguments have been tested rigorously both within the Treasury and within government and there is high pressure to make sure that the gain is worth the pain and that it does not jeopardise investment,” they said.
“We do not want to introduce random taxes that make the environment unpredictable for global companies that can go anywhere. We have to set the bar high and do something genuinely impactful and put in massive safeguards to ensure we do not jeopardise investment.”
The U-turn on the windfall tax will be seen as a win for Keir
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