Sunday shows: Labour proposes windfall tax to reduce gas and electricity bills

Elliot Chappell

Sunday Morning

Labour’s Shadow Chancellor Rachel Reeves said a “decade of dither and delay” from Conservative governments on reforming the energy sector was to blame for a “cost of living crisis”. She set out Labour’s immediate plans to mitigate high energy prices, introducing a VAT cut and a windfall tax, and long-term measures for wider reform.

  • On the cost of living crisis: “The increase in gas and electricity bills is a big part of that, potentially going up by as much as £700 in April.”
  • On the causes: “So much of this has been caused by more than a decade now of dither and delay on energy policy by the government… The UK is uniquely exposed because of a failure to properly insulate our homes, a failure to get on with the investment in nuclear and hydrogen and renewables, a decision – a crazy decision – to get rid of our gas storage facilities and a failure to regulate the market properly.”
  • On Labour’s plan to save household money and reform the energy sector: “Labour is setting out a packet of measures to help people with their bills now but also to properly reform this market so never again are we in this position.”
  • On cutting VAT on gas and electric bills: “The Prime Minister was the biggest advocate of cutting VAT on gas and electricity bills when he was campaigning in the EU referendum… I want to cut that VAT because it will save people £100 a year on their bills.”
  • On who would benefit from the VAT cut: “We know that pensioners, for example… families who are already struggling with the the cost of living crisis spend a higher proportion of their income on their bills.”
  • Put to her that a VAT cut is a “blunt tool”: “Everybody is experiencing a rise in their gas and electricity bills now, and this is something practical that the government could do and would be felt immediately.”
  • She added: “We are also increasing the Warm Homes discount to £400 a year and expanding the number of people who are eligible.”
  • On Boris Johnson: “The Prime Minister was previously a big advocate of this. The fact is that his broken promises will not pay people’s bills in April. The government should honour its own commitment and reduce that gas and electricity VAT right now.”
  • On a windfall tax: “We are proposing that those North Sea oil and gas companies who are going to making record profits this year because of that big spike in gas and electricity prices pay a bit more in tax to keep bills down for everybody else.”
  • On wider reform: “There’s two parts to the announcement today: the first part is the immediate help to people on their bills this year because of this huge spike in prices… But also recognising there are big problems in our energy market.”
  • On the National Insurance Contribution rise to be implemented in April this year: “The government has still got time – as Jacob Rees-Mogg has pointed out – the government has still got a chance to reverse it and we would do that… If we were in government, we would not be going ahead with it in April.”

Trevor Phillips on Sunday

Rachel Reeves commented on Labour‘s plans to save households £200 or more a year on their energy bills with a one-off windfall tax on North Sea oil and gas companies.

  • On Labour’s windfall tax: “It is right to ask those who have benefited from higher gas and oil prices to pay more into the system and that’s why I’m putting forward a one-off increase in the taxes paid by North Sea oil and gas.”
  • She added: “Chancellors have used this device before… when revenues and profits are particularly high: the previous Chancellor George Osborne did it in 2011, Gordon Brown and before him Margaret Thatcher, also, increased taxes for a short period of time on North Sea oil and gas.”
  • On reliance on imported gas: “We need to wean ourself off imported gas… and that’s why in the plan I’m setting out today is also a big boost in investment in renewables and in nuclear, in our hydrogen industry so we are not reliant.”
  • Put to her that Labour’s proposal to cut VAT on energy bills is regressive: “It is poorer households who spend a higher proportion of their spending on gas and electricity bills, and that is particularly so for pensioner households… So I don’t buy this idea that cutting VAT is somehow a regressive policy.”

First Minister and Welsh Labour leader Mark Drakeford discussed the contrasting approach Wales has taken to Covid restrictions compared to England, saying it is “better to have single messages across the UK”.

  • On Covid restrictions: “I’ve agreed with the Prime Minister many times that it is better to have single messages across the UK… So when we have different messages across our borders that does make it more difficult for us. But we faced this in the past, we go on doing as we see it the right thing to protect lives and livelihoods here in Wales.”
  • On Covid case rates being higher in Wales: “There are parts of Wales which are much lower than other parts of Wales, and parts of Wales that are much lower than the hotspots in England. So comparing the whole of Wales and the whole of England simply doesn’t get to where the real nub of the issue lies.”
  • On England not following other countries on restrictions: “I’m asked time after time why isn’t Wales doing the same things as England, and my answer was to point out in this debate that it is not Wales that is the outlier.”
  • He added: “Wales is following the same path of putting protections in place that is being followed by Scotland, Northern Ireland and not just devolved governments in the UK but governments across Europe and across the world. The question as to why the UK government has decided not to follow that course of actions is for them to answer.”
  • On whether restrictions in Wales could be strengthened: “We want restrictions to be in place for as short a time as possible… We’re hopeful that the level of protection we currently have in place will be sufficient.”
  • On the impact on the economy: “I completely reject the way in which UK ministers try to play the economy off against the needs of public health. If we don’t attend to the public health needs, the economy is simply affected in a different way.”
  • He added: “Our modelling shows that in about two weeks we will begin to pass the peak and then as we come down, when we’re confident we’re coming down, that’s when we’ll look to move back from the current protections.”
  • On Chester football club: “I’m sure there is a sensible, pragmatic solution here that doesn’t mean the club is placed in jeopardy but doesn’t result in the law being broken either.”

Labour mayor of Bristol Marvin Rees discussed the outcome of the Colston case, following a jury’s decision earlier this week to clear protesters responsible for toppling the statue of the slave trader. Rees said he is “glad” the statue is no longer in place, but warned of “symbolic acts and mere events being substituted for acts of real substantial, systemic change”.

  • Asked how significant the case is for Bristol: “In the lives of the four individuals it’s incredibly significant… For the work on race inequality in Bristol much more widely, it’s less significant.”
  • On wider anti-racism work: “We’re looking at those underlying drivers of political, economic inequality and the verdict itself doesn’t actually touch on those very real and immediate issues… We have to be careful about symbolic acts and mere events being substituted for acts of real substantial, systemic change.”
  • On the statue: “Make no mistake about it, I don’t like the idea of the statue being up in the middle of the city. I’m glad it’s not there. I think that the debate around our history, who we choose to celebrate as a country is important.”
  • He added: “Symbolic acts, while they’re important, if they begin to take the place of acts of political and economic policy and real substance, become a problem. Because we look around in five years, realise that nothing has really changed.”
  • He said: “Not all antiracism work is done with a banner, a T-shirt and a megaphone. Some of it is done by looking at housing policy, looking at affordable homes, looking at what we do to make sure people are fair.”
  • On other work done by his council: “Stuff that we’ve done over the last few years that has not got headlines, that has not brought tens of thousands of people on to the streets but led two years ago to 11 of 33 new magistrates in Bristol coming from Black and Asian backgrounds.”

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