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Rishi Sunak has refused to rule out introducing a one-off windfall tax on oil and gas producers in an attempt to cut household energy bills as Labour looks to force a Commons vote on the matter.
Sir Keir Starmer’s party are seeking to force a vote on an amendment which expresses regret that the policy was not included in the Queen’s Speech amid the cost of living crisis.
Debating the amendment in the Commons, shadow climate change and net zero secretary Ed Miliband said it was “shameful” that the government has not yet introduced a windfall tax and told Mr Sunak to “swallow your pride and get on with it”.
He called on Conservative MPs to join Labour in supporting the “fair and principled measure” which he said has support from business, trade unions and the “overwhelming majority of the public”.
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The chancellor said he does not believe that windfall taxes are the solution to every problem, but added that if oil and gas giants do not invest their profits back into “growth, job and energy security” then the policy could be introduced.
“If it doesn’t happen soon and at a significant scale then no option is off the table,” he told MPs.
The chancellor had recently said he is not “naturally attracted” to the idea of a windfall tax but that he would be “pragmatic about it” in light of the large profits oil and gas companies are currently generating due to elevated prices.
BP and Shell reported bumper profits earlier this year as energy prices skyrocketed.
Conservative MP Robert Halfon was one of the government’s own backbenchers who raised concerns about the industry, referring to oil company bosses as “the new oligarchs” with their “multi-million pound salaries” and “multi-million pound bonuses”.
“I would urge him to consider both a windfall tax on the oil companies – which we can then use to cut taxes for the lower paid or cut energy bills – and also to introduce a pump watch monitor to make sure there is fair competition and consumers get a fair deal at the pumps,” he told the Commons.
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Conservative chairman of the treasury select committee Mel Stride added that he would also support a windfall tax as it is a “sensible measure” in the current economic climate.
“I do think the arguments that he (Ed Miliband) has put forward are generally sensible, and I’m very pleased in turn that my right honourable friend the Chancellor has indicated that the door is at least partially open, albeit caveated on the investment performance of the companies concerned,” Mr Stride said.
Noting that Mr Sunak has had three chances in the last seven months to act on energy bills, Mr Miliband said: “The chancellor wants us to believe that his measures in response are the best we can do. But they are not. Not by a long shot.”
Calling the Treasury’s offering so far “woefully inadequate”, Mr Miliband questioned: “I would have no idea how I would cope in those circumstances. Would any member of this house?
“And if you are the chancellor of the exchequer and you can’t answer that question, it should tell you something – that you are failing in your duty to the people of this country, who most need your help.
“And of course, what makes him even more culpable is that there is something that could help staring him right in the face, where the case has become unanswerable, where the government has run out of excuses, where oil and gas producers are making billions: a windfall tax.”
He continued: “Crypto has crashed and so has the chancellor – and how similar they are. Came out of nowhere, the value surged, looked like the future but it’s all turned out to be one giant Ponzi scheme.”
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But Mr Sunak dismissed criticism of the economic help being provided to households by the Treasury.
“To suggest there is no help available is both misleading and irresponsible,” he said.
Mr Sunak also admitted that “the next few months are going to be difficult” for households because inflation is surging globally.
“There is no measure nay government can take, any law we can pass, that can make those global forces disappear overnight,” he told MPs.
“No honest chancellor can stand here and say prices won’t rise further.”
The chancellor also told MPs he will act to cut costs for people but did not say when this will happen.
It comes as a new survey of 2,000 Britons found that rising bills have meant one in four people have resorted to skipping meals.
More than four in five are concerned about the rising cost of living in the coming months, according to the Ipsos poll conducted exclusively for Sky News.
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