Cost-of-living crisis: Boris Johnson mocked over 'inevitable U-turn' on windfall tax

Boris Johnson has been mocked over an "inevitable U-turn" on plans for a windfall tax on oil and gas firms.

The Prime Minister is reportedly preparing to unveil a package of measures to combat the cost-of-living crisis, which could be announced as soon as today.

There is widespread speculation this will be funded with the help of a windfall tax, despite Conservative ministers previously insisting this was a “bad idea”.

It comes as SNP ministers urged the UK Government to implement a £30 billion support package.

Picture: Phil Noble/PA

Scottish finance secretary Kate Forbes called for an emergency cost-of-living payment for all UK households with below median income.

"I would suggest this be up to £1,000 to those on the lowest incomes,” she said.

Ms Forbes also called for benefits to be increased to match inflation, a further £25 uplift to Universal Credit and for the national living wage to be raised to £9.90, among other measures.

In a letter to Chancellor Rishi Sunak, she said: "Implementing a timely, targeted and cohesive economic support package that fully utilises your £30bn of fiscal headroom would support households and businesses that are struggling now.”

Mr Sunak was widely reported to be meeting with the Prime Minister to “sign off” on a “multi-billion-pound” cost-of-living plan.

Labour leader Sir Keir Starmer goaded Mr Johnson over the issue during Prime Minister's Questions, which took place shortly after the publication of Sue Gray's partygate report.

Channelling his inner Mrs Merton, he asked Mr Johnson: “What is it about the Sue Gray report that first attracted him to a U-turn this week?”

During an appearance on The Mrs Merton Show in the 1990s, Caroline Aherne famously asked TV star Debbie McGee: “What attracted you to the millionaire Paul Daniels?”

Mr Johnson replied: “There is no surprise about Labour’s lust to put up taxes.”

With inflation at a 40-year high, the UK Government has been repeatedly pressed to introduce a windfall tax to help fund extra support for households.

Sir Keir said: “It sounds like he’s finally seen sense and the inevitable U-turn may finally have arrived.

“So when can people across the country expect him to use those oil and gas profits to bring down their bills?”

The Prime Minister responded: “There is nothing original about a Labour plan to tax business.

"They want to tax business the whole time, every day Labour wants to put up taxes on business.”

Mr Johnson later claimed Sir Keir “loves running the country down”, with the Labour leader replying: “He talks about running this country down, he is running this country down.

“It wasn’t just complacency on Labour’s windfall tax, which he’s now backing.

"It wasn’t just complacency on inflation, which is now through the roof. And it wasn’t just complacency on growth, which is now spluttering along at the back of the pack.

“Because his Chancellor also claimed that people should keep more of the rewards of their efforts, and then he put their taxes up.”

Sir Keir questioned how Mr Johnson’s “15 tax rises” since taking office have helped people keep more of their own money.

Mr Johnson replied: “What we’re doing is making sure after a huge pandemic that we’re funding our vital public services, which we can, because of the steps we’ve taken.”

He outlined minimum wage increases and changes to Universal Credit as ways the Government had helped people keep more money.

Mr Johnson added: “He’s completely wrong about this country’s growth performance. He runs it down, he was proved wrong about Covid and he’s going to be proved wrong again.”

Labour MP Christian Wakeford, who defected from the Tories, said Mr Johnson had been drafting “half-arsed apologies” in the wake of Ms Gray’s report and asked if he had changed his mind on a windfall tax “just to save his own neck”.

Andy McDonald, Labour MP for Middlesbrough, said: “When we saw pictures of the PM partying in the middle of the pandemic, was he toasting his assault on the working class?

“I ask him – how on earth does he sleep at night with so much blood on his filthy, privileged hands?”

Possible measures set to be unveiled by the Government include increases in the warm homes discount, winter fuel allowance and a cut in council tax.

Mr Sunak previously said he was "not naturally attracted to the idea" of a windfall tax, adding: "But what I do know is these companies are making a significant amount of profit at the moment because of these very elevated prices.

"What I want to see is significant investment back into the UK economy to support jobs, to support energy security, and I want to see that investment soon.

"And if that doesn't happen, then no options are off the table."

UK energy secretary Kwasi Kwarteng has called a windfall tax a "bad idea", saying: “I don’t believe in windfall taxes because what you are taxing is investment in jobs, you are taxing investment in wealth creation, you’re taxing investment in new technologies such as hydrogen and carbon capture.”

Earlier this week Ofgem chief executive Jonathan Brearley told MPs the regulator was expecting the energy price cap to increase by a further £830 to £2,800 in October.

He said this was due to the market coping with “once-in-a-generation” price changes “not seen since the oil crisis of the 1970s”.

Mr Johnson was asked about the contraction of real wages at a press conference following the publication of Ms Gray’s report.

He said: "What I’m saying to people is that we will continue to respond, just as we responded throughout the pandemic.

"It won’t be easy – we won’t be able to fix everything. But what I would also say is that we will get through it, and we will get through it well.”