It’s time for a Windfall Tax

The news that the energy price cap will rise again in October, just months after the latest price hike, is shocking.

The current price cap was already raised as recently as last month by an eye-watering 54% and, with millions already struggling to make ends meet, the latest hike will push many below the poverty line. 

Across the country people are still struggling to pay the additional £693 from the last rise; now they are now faced with having to find a further £829, following the Ofgem Chief Executive’s comments in Parliament this week that the latest rise will be “in the region of £2,800”, up from the current cap of £1,971.

The new price cap will take energy bills to the highest level as a proportion of household spending since comparable records began in the 1950s. That is a cause for deep concern, even more so when set against rising inflation that is expected to reach 10% by the end of the year.

Indeed, the Resolution Foundation has stated that the increase could mean 9.6 million households in England will be in “fuel stress” – meaning that at least 10% of a household’s total expenditure is spent on energy bills – this winter.

And, just this week, a poll published by YouGov found that three in ten households are cutting back on food and other household essentials as the cost-of-living crisis continues.

How bad does the situation need to be for the Government to act? We need an emergency budget immediately, with a windfall tax on oil and gas producer profits to lower bills and ease living standards for millions across the country.

This is nothing less than a social emergency and the Government should be taking every measure possible to support the British people. The Government’s current measures of 5p off fuel, or even £350 off bills, simply don’t cut it in the face of the biggest squeeze on living standards in 70 years.

Anything less than meaningful action to tax greedy corporations will leave millions in dire straits.