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Keir Starmer Accuses Boris Johnson Of Doing The “Hokey-Cokey” Over Windfall Tax

Boris Johnson was urged to implement a windfall tax on oil and gas companies to deal with the cost of living crisis (UK Parliament/Jessica Taylor)

4 min read

Labour leader Keir Starmer has accused Boris Johnson of doing the “hokey-cokey” over a windfall tax on oil and gas companies and urged the Prime Minister to implement one now.

Starmer used a heated Prime Minister’s Questions session to dismiss the government’s position on a windfall tax as “clear as mud” after the Chancellor Rishi Sunak said he would be open to the levy, while numerous Cabinet ministers have come out against it.

"One minute they're ruling it in, next they're ruling it out – when will he stop the 'hokey-cokey' and just back Labour's plan for windfall tax to cut household bills,” Starmer asked Johnson in the Commons. 

Johnson accused Labour of always wanting to raise taxes to solve problems, and said the whole world is facing the same economic problems caused by the Covid-19 pandemic and the Russian invasion of Ukraine.

“We always knew that there would be a short term cost in weaning ourselves off Putin's hydrocarbons and in sanctioning the Russian economy,” Johnson said.

“Everybody in this House voted for those sanctions, we knew that it would be tough, but I just want to tell the Right Honourable gentleman that giving in, not sticking the course, would ultimately be the far greater economic risk.”

But the PM did also suggest a one-off windfall tax was not off the table.

“Of course we will look at all the measures that we need to take,” he added. 

Starmer said Johnson’s answers showed he “doesn't actually understand what working families are going through in this country, struggling about how they're going to pay their bills”.

He added that the public should expect a Prime Minister "who concentrates on the cost of living crisis" as inflation reached 9%, the highest for 40 years.

Johnson defended the government's record on unemployment, which has reached its lowest level since before the pandemic began, and accused Labour of a “lust to raise taxes”.

Earlier today a Cabinet minister warned there could be a "couple of bumps to get through" before inflation settles down, after the Office for National Statistics reported it soared to 9% in the year to April, up from 7% in March.

International Trade Secretary Anne-Marie Trevelyan told an event at Bloomberg's headquarters in London countries were "facing a global battle”. 

"This is something we have to tackle across the board," she added. 

"And the worry we always have is that inflation tends to have two bumps to it.

"You have the initial one that is caused by this energy spike and immediate global rise but what can follow is the longer term impact and indeed through food production and particularly with disruption to Ukraine.”

The increase in the Consumer Prices Index was the fastest measured rate of inflation since records began in 1989, and highest overall figure since 1982.

Earlier Chancellor Rishi Sunak warned he could not "protect people completely" from the cost-of-living squeeze despite calls from business groups, charities and opposition politicians to cut taxes or increase state support for firms and households struggling to cope with rising prices.

"Countries around the world are dealing with rising inflation,” he said.

"Today's inflation numbers are driven by the energy price cap rise in April, which in turn is driven by higher global energy prices.

"We cannot protect people completely from these global challenges but are providing significant support where we can, and stand ready to take further action.”

Sunak pointed to the £22billion in support the Treasury has already pledged, including £9billion to deal with household energy bills, but faces calls to go further rather than wait for the autumn Budget.

As well as opposition parties some Tory MPs also want to impose a windfall tax on oil and gas companies, however ministers are continuing to resist the idea.

Foreign Secretary Liz Truss told Sky News: "The problem with a windfall tax is it makes it difficult to attract future investment into our country. So there is a cost in imposing a tax like that.

"And my view is lower taxes are the best way to attract more investment, to get the businesses into this country that can create these high paid jobs, which is what we need to face down these global headwinds."

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