Labor Proposes Exceptional Tax on North Sea Oil and Gas to Help Solve Energy Price Crisis

LABOR suggested imposing a one-off tax on North Sea oil and gas producers – with the funding used to cut household energy bills by an average of £ 200 to help tackle the cost of living crisis. life.

The party’s £ 6.6bn plan would include removing VAT from domestic energy bills for an entire year, as well as extending and increasing the hot house rebate for those in need. more at risk.

Fossil fuel producers would be forced to contribute £ 1.2bn to help fund the proposals, through their corporate tax hike by 10 percentage points year-round.

Phantom Chancellor Rachel Reeves blamed UK ministers for creating a “price crisis” by responding to soaring wholesale energy prices with “hesitation and delay” as she laid out her plan.

The UK government is under increasing pressure to act, with experts predicting a 50% increase in bills in April, meaning the average household will pay around £ 700 more per year.

READ MORE: Fears SNP is avoiding nuclear power will lead to higher energy bills

Labor say his proposal would save most households around £ 200, while targeted support for low wages, retirees and people in tight circles would save them £ 600.

It would spend an additional £ 3.5 billion on the hot house rebate, increasing it from £ 140 to £ 400 a year, while pledging to double the number of eligible households to 9.3 million.

VAT would also be removed from household energy bills for a year from April, six months more than Labor had previously requested, at a cost of around £ 2.5bn.

Smoothing out supplier default costs by removing them from customer bills would cost £ 2.6bn, while a £ 600m contingency fund would be set up to support energy-hungry businesses.

In addition to the corporate tax increase for North Sea oil and gas producers in 2022/23, Labor said the money would come from a forecast of $ 3.1 billion additional pounds sterling in VAT revenue due to price increases.

The last £ 2.3bn required would come from projected additional North Sea oil and gas revenue, according to figures used by the party.

Ms Reeves said: “There is a global gas price crisis, but 10 years of Conservative energy policy failure, hesitation and delays, has created a price crisis that is felt by everyone. . ”

In addition to the temporary measures, she said Labor would work to prevent price hikes by ramping up local renewables and new nuclear.

READ MORE: SNP, Greens warned oil and gas rhetoric had ‘shaken investor confidence’ and risked jobs

She also said the party would renovate 19 million homes to lower bills and “reform our faulty energy system to prevent energy companies from playing fast and by the rules.”

Experts believe the surge in wholesale costs will lead to a 50% increase in April, when the change in the energy price cap, determined next month, goes into effect.

This would force an average household on a supplier’s default tariff to pay almost £ 2,000 a year for their gas and electricity, compared to less than £ 1,300 today.

Responding to Labor’s proposals, a UK government spokesperson said: “Energy price caps are currently protecting millions of consumers from high gas prices globally. We will continue to listen to consumers and businesses on how to manage energy costs.

“We recognize that people face cost-of-living pressures, which is why we are taking action worth over £ 4.2bn and supporting vulnerable households through initiatives such as the £ 500million household support fund, the warm house rebate, winter fuel payments and cold weather payments.

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