Truss confirms opposition to energy windfall tax to fund £100bn+ package
Liz Truss has confirmed she will not slap a new tax on North Sea oil and gas producers to pay for her £100bn+ package of support to households and businesses.
Labour leader Sir Keir Starmer said during Prime Minister’s Questions (PMQs) that Truss’ plan to increase borrowing to fund the emergency package is akin to making “working people foot the bill for decades to come”.
The new Prime Minister will outline her plan to freeze energy bills for British households tomorrow morning, with speculation rife that annual bills will be capped at £2,500.
This is higher than the current energy price cap of £1,971, but far below the prices that Brits would pay if there was no intervention this autumn and winter.
Chancellor Kwasi Kwarteng today told City chiefs that government debt would have to increase to fund the deal, but that the government would return to “fiscal discipline” in the medium-term.
Truss said that paying for the package with another windfall tax would lead to firms “putting off investing in the United Kingdom, just when we need to be growing the economy.”
Starmer said that her plan to freeze energy bills, which was first advocated by Labour, “won’t be cheap, and the real choice, the political choice, is who is going to pay”.
He said: “Is she really telling us that she’s going to leave these vast excess profits on the table and make working people foot the bill for decades to come?”
Truss and Starmer also clashed over the new Prime Minister’s plans to cancel an increase in Corporation Tax for the UK’s most profitable firms.
Corporation Tax was due to increase for profits over £250,000, however Truss has vowed to cancel the increase due to the country’s poor economic forecasts.
Starmer said”companies that are already doing well are getting a £17bn tax cut while working people pay for the cost-of-living-crisis”.
Hitting back, Truss said: “What I am about is about reducing taxes, getting our economy growing, getting investment, getting new jobs, for people right across the country.
“I am afraid to say the right honourabnle gentleman doesn’t understand aspiration, he doesn’t understand opportunity, he doesn’t understand that people want to keep more of their own money and that is what I will deliver as Prime Minister.”