(Bloomberg) -- The UK’s opposition Labour Party is forcing a vote in the House of Commons on Tuesday on whether to slap a windfall tax on energy company profits to help tackle an escalating cost-of-living crisis.
While Labour is unlikely to win the vote because Prime Minister Boris Johnson’s Conservatives enjoy a working majority of 75 in the Commons, the move piles pressure on the ruling party to show what more it can do to help Britons cope with inflation at a 30-year high that’s causing the worst squeeze on living standards since the 1950s.
The measure “now has support from business, trade unions, across the political spectrum and most importantly, the overwhelming majority of the public,” Ed Miliband, Labour’s spokesman on climate change, said in a statement. “Conservative MPs must now join the British people in calling for a windfall tax -- or explain why they continue to oppose measures that would ease the cost-of-living crisis.”
The vote comes weeks after both Shell Plc and BP Plc reported massive profits due to oil and gas prices that were rocketing even before Russia’s invasion of Ukraine in February added further upward pressure.
Labour has been pushing for a windfall tax since January, and under the opposition party’s plan, the proceeds would pay for a cut in value added tax on energy bills and an increase to the warm homes discount for poorer households.
But Johnson, Chancellor of the Exchequer Rishi Sunak and Business Secretary Kwasi Kwarteng have repeatedly rebuffed Labour’s calls to introduce the levy, saying it would discourage companies from investing in long-term energy projects.
Sunak in recent weeks has opened the door to the prospect, telling the BBC last week that he wanted to see the big energy companies putting “significant” investment into the U.K. “soon,” adding that “if that doesn’t happen, then no options are off the table.”
Johnson’s spokesman, Max Blain, repeated that position on Monday, telling reporters it was “right” to keep “all options on the table,” while reiterating that neither Johnson nor Sunak supports the introduction of a windfall tax.
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