Liz Truss has been accused of making ordinary Britons “foot the bill” for her plan to freeze energy bills, as she ruled out a windfall tax on the oil and gas companies.
In a feisty first exchange at PMQs, Labour leader Sir Keir Starmer said it was “extraordinary” that the new Tory prime minister was refusing to ask the fossil fuel giants to pay more during the energy crisis.
“Her first act is to borrow more than is needed because she won’t touch oil and gas profits,” Sir Keir said. “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?”
Ms Truss told the Commons: “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.”
To huge cheers by Tory MPs, the new PM added: “Nothing new about a Labour leader who is calling for tax rises – it’s the same old tax and spend.”
Sir Keir said there is “nothing new” about a PM who “nodded through every decision that got us into this mess”, adding: “There’s nothing new about a Tory prime minister who when asked who pays says, ‘It’s you, the working people of Britain’?”
Ms Truss confirmed that she would set out her plan to tackle soaring energy bills in parliament on Thursday – promising that it “will give people certainty” and “help businesses as well as individual households”.
The PM is working to finalise a multi-billion package to freeze household gas and electricity bills and cut businesses’ costs, with some estimates that the package could cost over £100bn.
A government source confirmed that the plan is to freeze annual household energy bills around the £2,500 mark. It is based on the current £1,971 cap – plus the £400 universal handout announced under Boris Johnson’s government.
SNP Westminster leader Ian Blackford said the new PM had failed to rule out “a Truss tax”, as he warned that subsiding energy suppliers could mean an extra levy on families’ bills once the worst of the crisis is over.
Mr Blackford warned that it could amouny to “a decade long raid on the bank accounts of ordinary consumers”.
Sir Keir pointed to £170bn of “excess profits” that oil and gas producers are expected to enjoy in the next two years, an estimate made in recent Treasury analysis leaked last month.
The Labour leader also accused Ms Truss of protecting the profits of Shell and giving Amazon a major tax break through corporation tax cuts rather than helping families and public services.
He said: “Not only is the prime minister refusing to extend the windfall tax, she’s also choosing to hand the water companies polluting our beaches a tax cut. She’s choosing to hand the banks a tax cut.”
But Ms Truss said that if taxes are put up and raised to “the same level as France” it will put off investors. “The right honourable gentleman is looking at this in the wrong way. The last time we cut corporation tax we attracted more revenue into the Exchequer.”
Ms Truss claimed the Labour leader “doesn’t understand aspiration, he doesn’t understand opportunity – he doesn’t understand people want to keep more of their own money”.
Ms Truss said she would take measures to boost supply of energy supply in the long-term – including “opening up” more oil and gas drilling and committing to new nuclear developments.