Oil and gas bosses should face a “bonanza bonus” tax to fund a reduction in household energy bills, according to the Liberal Democrats.
Chancellor Jeremy Hunt has said extra support is unlikely because the government does not have enough “headroom” with the public finances. He has rejected calls to halt an increase in energy bills when he delivers his Budget on 15 March.
Labour has called on the government to freeze energy bills through to July and fund this through an increased windfall tax on energy company profits. The Lib Dems however are arguing for them to be cut instead.
Recent sharp falls in wholesale gas and electricity prices have raised hopes that the worst of the energy crisis could be receding, with a typical household bill likely to fall to £2,153 in July. The Lib Dems are calling for a one-off levy on bonuses awarded to oil and gas executives, similar to the bankers’ bonuses tax in 2009/10.
The party is also proposing to reduce average energy bills to £1,971 and double the Warm Homes Discount to £300, which they say will save the average household an estimated £400 over the next 12 months.
Sir Ed Davey, leader of the Liberal Democrats, said: “If there’s no extra energy help for businesses, it will be more than salad and vegetables in short supply as firms as well as farms are forced to close. To add insult to injury, it’s just obscene that Rishi Sunak is happy for energy bosses to rake in millions of pounds in bonanza bonuses, while families struggle to put food on the table or heat their homes.”
The Lib Dems say their plan would mainly be funded by money already budgeted for energy support, but not spent due to falling wholesale energy prices. Additional funds would be raised through their proposed windfall tax on oil and gas companies’ record profits.
The Liberal Democrats have called on the government to drop plans for a £500 hike in household energy bills and instead reduce them. They say their proposals would help struggling families afford their energy costs and enable businesses, schools and hospitals to receive current levels of support for another six months. The party also wants a one-off bonus tax on oil and gas executives bonuses, similar to the bankers’ bonus tax of 2009/10.
