Rachel Reeves on Rishi Sunak’s windfall tax U-turn: “We lead, they follow”

Below is the text of the speech delivered by Shadow Chancellor Rachel Reeves in response to the government’s energy announcement in parliament today.

Mr Speaker, after today’s announcement, let there be no doubt about who is winning the battle of ideas in Britain – it is the Labour party. We first called for a windfall tax on oil and gas producers nearly five months ago to help struggling families and pensioners. And it was Labour that first highlighted the unfairness of this government’s ‘buy-now-pay-later’ compulsory loan scheme. It didn’t take a rocket scientist to work out that this wouldn’t cut it –and we pointed it out at the time.

But that is just the mark of the Klarna Chancellor. Announce now – ditch later. Here he is, once again, the Treasury’s one-man rebuttal unit, the Chancellor himself. For months, it has been clear that more was necessary to get people’s bills down. So what took this government so long? Every day that they have refused to act, £53m has been added to Britain’s household bills in this cost of living crisis. This government’s dither and delay has cost our country dearly.

On this side of the House, we welcome the fact that the government is finally acting on our calls to introduce a windfall tax, and it’s good to see the SNP U-turning today too and saying they’re now in favour of a windfall tax on oil and gas profits. It was a painful journey to get the government here.

First, Conservative ministers said that oil and gas producers were “struggling”. But the chief executive of BP said the energy crisis was a “cash machine” for his business. Second, ministers claimed a windfall tax would put off vital investment. But the industry said it wouldn’t change their plans. Then they said it was “un-Conservative”. So un-Conservative in fact that Margaret Thatcher and George Osborne did the very same thing. Finally, the Chancellor said it would be “silly” to offer help now given he didn’t know the full scale of the challenge. What nonsense.

It shouldn’t take half a million pounds of publicly funded focus groups for the Chancellor to realise that helping families and pensioners is the right thing to do. Every day now, for five months, the Prime Minister sent Conservative MPs out to attack the windfall tax and yet defend an increase in taxes on working people. He’s made them vote against it three times. And for months he’s sent his own MPs to defend the litany of rule breaking in Downing Street set out in the Sue Gray report.

There is a lesson here for Conservative MPs. You can’t believe a word this Prime Minister says. And as long as he’s in office, he’s going to keep making a fool out of each and every one of you. If they keep him there Mr Speaker, that’s the choice they are making. The problem, Mr Speaker, is that you can’t fake fairness. You either believe in it, or you don’t. Labour called for a windfall tax because it is the right thing to do. The Conservatives are doing it because they needed a new headline.

And we see that too from all the other things that he didn’t address today. The non-doms keep their tax privileges while the Chancellor hikes taxes on working people. Young working people paying more but those who earn money buying and selling stocks and shares are not. Contracts handed to Conservative friends and donors while our British businesses miss out. Global tech giants making billions in profits while smaller businesses and energy intensive industries struggle – with higher bills and higher taxes. And £11.8bn lost in fraud because of a total lack of respect for taxpayers’ money.

That’s why we should have had an Emergency Budget today to spike the hike in National Insurance, cut small business rates, provide help for energy intensive firms and ensure that every pound of taxpayers’ money is spent wisely. Mr Speaker, we will look closely at the detail of today’s announcement. But so far, we have seen nothing to suggest that this Conservative government has the ideas or the energy to tackle the challenges we face as a country.

A Labour government would have addressed the underlying weakness in our economy so we can stop this spiral of inflation, lift wages and provide greater security for families and for our country. The truth is that they are running our economy and people’s living standards into the ground. We are forecast to have the slowest growth in the G7 next year, and the highest inflation. This government has weakened the foundations of our economy, leaving us exposed to shocks as we lurch from crisis to crisis.

And they still refuse to come forward with a real plan to fix our broken economy. And provide the security we need to face the future with confidence. That means boosting our energy security too. We need to do much more to reduce our reliance on imported oil and gas. That is why Labour’s energy security plan includes a rapid programme of home insulation to reduce bills not just for one year, but for years to come, and get us all the way to net zero. It’s why we’ve urged the government to double onshore wind capacity, and to end the delay on nuclear power. While we’re at it why did they get rid of our gas storage? Which would better protect us from wild fluctuations in prices. When will this government provide the strong leadership this country needs?

There are a number of questions for the Chancellor about his announcement today. How many are still waiting for the support that was promised in March? A third of the Chancellor’s own constituents are still waiting for their council tax discount. Is it the case that households are still being asked to pay supplier of last resort costs for those energy suppliers who have gone bust as a result of a decade of failed energy market regulation? Can he tell the House how is this package being funded outside of the proceeds of a windfall tax? If you have more than one home, do you get this discount multiple times?

I know he’s in the market for other ideas and he’s adopted two of them today – but why has he not adopted a third – which was once touted by the Prime Minister himself? A cut in VAT on energy could have been delivered overnight and would have already saved households money if he had implemented it when I called for it last October? This was touted as the big Brexit bonus – but the Chancellor hasn’t been able to introduce this tax cut.

This is a chaotic, discredited and rudderless government whose policies rarely last more than a few months. We pushed for the windfall tax. They’ve adopted it. We said the buy-now-pay-later scheme was wrong. Now they’ve ditched it. This government is out of ideas, out of touch and out of time. When it comes to the big issues facing the country, Mr Speaker, the position is now clear: we lead, they follow.