Truss facing new test as EU plans windfall tax
More pressure for a windfall tax is likely to be piled on Prime Minister Liz Truss next week after the European Union moved to impose a levy on energy companies.
The European Commission has tabled regulations for a windfall tax on oil, gas, coal and refining companies, as well as a cap on electricity prices, to raise €140 billion to be used to offset consumer bills.
Responding to the squeeze on supplies and higher prices resulting from the war in Ukraine, it will also set mandatory targets to cut power use.
Ursula von der Leyen, the Commission president, said: “These companies are making revenues they never accounted for, they never even dreamt of.
“In our social market economy, profits are good. But in these times it is wrong to receive extraordinary record profits benefiting from war and on the back of consumers.”
The EC’s move may stoke more calls for the UK Government to introduce a windfall tax which has been demanded by opposition parties. The Prime Minister has followed her predecessor in resisting such a call, arguing that it would impact negatively on the oil and gas companies’ plans to invest in clean energy alternatives.
However, UK ministers are likely to be pressed to do more to help consumers and struggling businesses as they announce details of their recently-announced support package in an emergency “mini budget” next week.
Downing Street yesterday said the support announced for business last week would be backdated if the scheme was delayed.