Prime Minister Liz Truss says she will take “immediate action” to deal with soaring energy bills – and will make an announcement tomorrow.
However she has been accused of “protecting profits and forcing working people to pay the bill” after ruling out extending the windfall tax to fund her energy plans.
Ms Truss is widely expected to announce a freeze on the energy price cap, with reports suggesting the policy could cost up to £150bn.
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Asked during Prime Minister’s Questions whether she will introduce a windfall tax on energy giants to pay for this, Ms Truss said “we cannot tax our way to growth”.
Clashing with Labour leader Sir Keir Starmer, he accused her of “making hardworking people pay”.
He cited Treasury estimates that energy producers will make £170 billion pounds in excess profits over the next two years.
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He said: “The prime minister claims to be breaking orthodoxy, but the reality is she’s reheating George Osborne’s failed corporation tax plan, protecting oil and gas profits and forcing working people to pay the bill.
“She’s the fourth Tory prime minister in six years. The face at the top may change, but the story remains the same.”
Sir Keir said the former foreign secretary had “nodded through every single decision that got us into this mess”.
He added: “Can’t she see there’s nothing new about a Tory prime minister who, when asked who pays, says it’s you, the working people of Britain.”
But Ms Truss hit back saying there is “nothing new about a Labour leader who is calling for more tax rises”, and accused Sir Keir of failing to “understand aspiration”.
She insisted she was taking “immediate action to make sure we have lower taxes and we grow the economy”.
Earlier, the prime minister held her first cabinet meeting with her newly assembled top team.
It has been reported that annual bills will be frozen at around £2,500 – more than £500 above the current price cap but £1,000 less than the limit due to be imposed in October.
Labour has called for the energy price cap to be frozen now, which would be paid for by introducing a new windfall tax on oil and gas companies’ profits without a “major tax loophole” it claims the government’s current windfall tax has.
