Government adopts Labour’s energy windfall tax

It’s good to see the Government has finally decided to adopt Labour’s proposal to impose a windfall tax on the profits of energy companies, after months of refusals.

With the money raised, all households will now receive a £400 reduction in their energy bills in the Autumn. The previous £200 loan scheme has been scrapped.

Households in receipt of Universal Credit, Tax Credits, Pension Credit, or legacy benefits will also get an additional £650. It will be delivered in two instalments, one in July and one in the Autumn. Anyone who was in receipt of any of the above benefits on 25 May or had begun a claim that is later successful by that date, will be entitled to the first payment.

There are also separate one-off payments of £300 to pensioner households and £150 to people receiving disability benefits.

It won’t solve the cost-of-living crisis, and we’ve yet to see the full details, but I broadly welcome the extra support announced today. But it shouldn’t have taken this long for the Government to act.

It’s been nearly 5 months since Labour started the campaign for a windfall tax. Ministers have known people were really struggling for some time. They didn’t need to wait for months to pass- and for a damaging report on the partying culture in Downing Street during lockdown to be published- before announcing additional support.

I and colleagues will continue to call for additional measures to help with the cost of living, like scrapping the National Insurance hike, and for more ambition on insulating homes to make them more energy efficient and cheaper to heat.