Rishi Sunak could impose windfall tax on oil and gas companies today: 'The politics is irresistible!'

Mr Sunak will speak in the House of Commons later today as he faces pressure to impose the tax

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Rishi Sunak could impose a windfall tax on oil and gas companies later today in a bid to ease the cost-of-living crisis.

Mr Sunak is under pressure to bring in such a tax, and could announce the policy in the House of Commons later.

The Government has given mixed messages about such a levy in recent days, with Mr Sunak saying while he was “not naturally attracted” to the idea, “no option is off the table".

And Prime Minister Boris Johnson said they would look at the proposal, before suggesting that he didn't think a windfall tax is "the right way forward”.

Rishi Sunak could impose a windfall tax later today
Rishi Sunak could impose a windfall tax later today
Liam Halligan believes the 'politics is irresistible' as pressure builds on Rishi Sunak
Liam Halligan believes the 'politics is irresistible' as pressure builds on Rishi Sunak

But GB News’ Economics and Business Editor Liam Halligan believes there is a strong chance that such a policy will be implemented.

Speaking on GB News’ Breakfast with Eamonn and Isabel, Liam said: “I think it’s on the cards, I’ve been saying it’s been on the cards for a few weeks now.

“This is, of course, a Labour Party proposed policy. The Shadow Chancellor Rachel Reeves was talking about a windfall tax many months ago.

“And I just think the politics of this, whatever you think of the economics, the politics is simply irresistible.

“To tax these big oil and gas giants, the likes of BP made £5.1billion in profit in the first three months of this year, Shell made £7.4billion.

“Not because they’ve done anything different, but just because the war in Ukraine has led to energy prices spiralling.

“If you tax those, those don’t vote, you say you’re giving the money to hard-pressed households.

“That adds up to some quite attractive politics for ministers who really are running out of ideas about what to do."

Liam's comments come just a day after the Governor of the Bank of England warned there is “very real income shock” coming from energy prices and “apocalyptic” food prices but stood by the Bank’s policy decisions.

Andrew Bailey said he felt “helpless” as he defended the Bank's monetary policy despite households being battered by soaring inflation.

Mr Bailey told MPs at the Treasury Select Committee on Monday that UK consumer demands will be impacted by current inflation, which is the highest in 30 years, and this is expected to cause higher unemployment.

The Office for National statistics recorded inflation at seven percent in March and later this week is expected to unveil over eight percent inflation for last month.

The Bank of England has said inflation is likely to peak at 10.25 percent during the final quarter of 2022.

Mr Bailey said: “The main driver of inflation and what brings it down is the very big, real income shock which is coming from outside forces and, particularly, energy prices and global goods prices.

“That will have an impact on domestic demand and it will dampen activity, and I’m afraid it looks like it will increase unemployment."