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Government Expected To Announce Windfall Tax On Oil And Gas The Day After Partygate Report

2 min read

Rishi Sunak is expected to announce a windfall tax on oil and gas companies tomorrow as Boris Johnson issued a plea to move on following the publication of Sue Gray's report into parties held in Downing Street during lockdown.

PoliticsHome understands a government U-turn on previously expressed resistance to the policy will be confirmed on Thursday when the Chancellor is expected to give a statement to the Commons chamber.

The anticipated announcement of a windfall tax comes as the Prime Minister battles to revive his reputation following the publication of Sue Gray’s report into parties held in Downing Street and Whitehall during lockdown.

Government hopes the announcement of further measures to help households cope with the soaring cost of living will move public discourse on from partygate.

On Wednesday afternoon the Labour party instructed its MPs to ensure they attend Parliament on Thursday unless they had already arranged to travel to Wakefield where byelection campaigning is underway.

"We now expect an important statement from the Chancellor tomorrow,” party officials messaged MPs.

“It is likely that this will be a u-turn to announce a Windfall Tax. With the exception of those booked to go to Wakefield, colleagues should change their arrangements for tomorrow in order to be here."

Treasury sources did not deny to PoliticsHome that a windfall tax announcement is imminent. One source close to Sunak reiterated recent claims that "nothing if off the table" in relation to new cost of living measures. 

On Tuesday, energy regulator Ofgem announced that the price cap on gas is expected to increase by around £800 in October. Ahead of the publication of the Gray's findings, The Telegraph reported that Downing Street could announce a windfall tax "within days" an in attempt to move on from partygate. 

Labour has long called for government to impose a one-off tax on oil and gas companies who have seen profit margins soar as a result of the pricing crisis.

The idea has had growing traction among Conservative MPs, with senior Tories Robert Halfon and Mel Stride publicly backing the policy.

A senior Conservative party source told PoliticsHome the public "can expect something quite comprehensive tomorrow". 

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