PMQs: Truss shuts down Blackford over windfall tax
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In her first session of PMQs on Tuesday, the Prime Minister stuck by her refusal to slap down a tax on energy giants which are raking in billions due to volatile gas markets, while millions of households, who will be forced to fork out extra cash, brace for fuel poverty this winter. It comes as the country’s new leader looks set to announce a multi-billion pound plan to freeze bills at £2,500 on Thursday, a £1,000 drop from the expected October price cap announced by industry regulator Ofgem.
While the plan may bring a relief to millions of households which may have been unable to cope with the eye-watering 80 percent rise from current levels, Labour Leader Sir Keir Starmer has questioned how this plan, which could cost up to £130billion, will be funded.
He said in the House of Commons on Tuesday: “When she said in her leadership campaign that she was against windfall taxes, did she mean it?”
But Ms Truss stuck by her original position, responding: “I am against a windfall tax. I believe it is the wrong thing to be putting companies off investing in the United Kingdom, just when we need to be growing the economy.”
It comes as forecasts from the Treasury indicate skyrocketing prices could see oil and gas firms rake in £170billion in profits on top of previous predictions over the next two years.
Sir Keir added: “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?”
The Labour leader also noted that Ms Truss had “no choice” but to back the bills freeze, a policy his party in fact put forward first, while the new Prime Minister initially ruled out “handouts” and direct help on bills.
Sir Keir said: “It won’t be cheap, and the real choice, the political choice, is who is going to pay.” He later added: “More borrowing than is needed – that’s the true cost of her choice to protect oil and gas profits, isn’t it?”
Ms Truss, throughout her leadership campaign and today in the Commons, insisted that she would “keep taxes low”. During her heated debates with opposite number Rishi Sunak, she instead suggested schemes and public services could be propped up by public borrowing.
Mr Sunak warned that this could worsen inflation, which is already at 10 percent and is tipped to soar further amid a cost of living crisis. Some economists have warned that public borrowing could add to the gap between Government spending and revenue (deficit) – and this is how many expect the bills freeze plan will be funded.
But according to some reports, the Government may offer loans to energy suppliers to fund the price freeze, which would then be repaid by consumers with an extra levy on household bills once Britain escapes the energy crisis.
Sir Keir raised more concerns about keeping taxes low during PMQs, warning that “families and public services need every penny they can get”.
He added: “There is nothing new about the Tory fantasy of trickle-down economics. Nothing new about this Tory prime minister who nodded through every single decision that got us into this mess and now says how terrible it is.
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“Can’t she see, there’s nothing new about a Tory prime minister who, when asked ‘who pays?’ says: ‘It’s you, working people of Britain’?”
But some economists have claimed that freezing energy prices could help to stop the consumer price inflation rate from peaking at a higher level,
Ms Truss claimed the country will not “be able to tax its way to growth”.
She said: “The way we will grow our economy is by attracting investment, keeping taxes low, delivering the reforms to build projects quicker. That is the way that we will create jobs and opportunity across our country.”
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