Sir Keir Starmer has urged Boris Johnson to stop dithering and make an “inevitable U-turn” on imposing a windfall tax on oil and gas producers.
The Labour leader said the Prime Minister was performing the “hokey cokey” over the policy and had not taken swifter action as he “doesn’t actually understand what working families are going through” in the UK.
Mr Johnson defended the Government’s existing package of support in response to cost-of-living increases, adding that “all sensible measures” will be looked at.
A Labour amendment to the Queen’s Speech asking for a new tax on the profits of oil and gas producers was defeated by 310 votes to 248, majority 62, and was not supported by any Conservative MP.
Speaking at Prime Minister’s Questions, Sir Keir said a one-off tax would “raise billions of pounds, cutting energy bills across the country”.
He also highlighted differing views in the Cabinet and described their position as “clear as mud”.
Mr Johnson said the UK and the world faces problems in the cost of energy “driven partly by Covid and partly by (Vladimir) Putin’s war of choice in Ukraine”, adding: “We always knew that there will be a short-term cost in weaning ourselves off Putin’s hydrocarbons, and in sanctioning the Russian economy.”
The Prime Minister said “not sticking the course would ultimately be that far greater economic risk”.
He added: “We will look at measures, we will look at all the measures that we need to take, to get people through to the other side but the only reason we can do that is because we took the tough decisions that were necessary during the pandemic, which would not have been possible if we listened to him.”
Sir Keir countered: “Whilst he dithers, British households are slapped with an extra £53 million on their energy bills every single day. Meanwhile every single day North Sea oil and gas giants rake in £32 million in unexpected profits.
“Doesn’t he see that every single day he delays his inevitable U-turn, he’s going to do it, he’s choosing to let people struggle when they don’t need to?”
Mr Johnson referred to support already on offer, adding: “I’m going to look at all measures in future to support, of course I am, but the only reason we can do that, the only reason our companies are in such robust health, is because of the decisions that this Government has taken.”
Sir Keir listed Tory MPs and company bosses who support a windfall tax, adding: “And on the other side? The member for North East Somerset (Jacob Rees-Mogg) – when he’s not sticking notes on people’s desks like some overgrown prefect – is dead set against it.
“When is he finally going to get a grip, stand up for the people of Britain and get on the right side of the argument?”
Mr Johnson replied: “Nothing could be more transparent from this exchange than their lust to raise taxes.
“We don’t relish it, we don’t want to do it, of course we don’t want to do it, we believe in jobs and we believe in investment and we believe in growth. As it happens, the oil companies concerned are on track to invest about £70 billion into our economy over the next few years, they’re already taxed at a rate of 40%.”
Mr Johnson added: “Of course we will look at all sensible measures but we will be driven by considerations of growth, investment and employment.”
Sir Keir said many people are “living through this nightmare and they feel totally abandoned” by the Government.
He raised the case of Phoenix Halliwell, who undergoes life-saving dialysis treatment for a rare kidney condition between 10pm to 7am for five days a week.
Sir Keir said: “Even though his wife – who is a midwife in the NHS – works extra shifts, during the winter they had to turn their central heating off and Phoenix skips meals to make ends meet, but their energy bill has still doubled.
“Phoenix says he feels like he’s being priced out of existence and it’s not just him – millions of our disabled, elderly and vulnerable neighbours are at the sharp end of this crisis, they simply can’t afford to live with dignity.”
Mr Johnson said the NHS does “cover the costs” of those on dialysis and offered to look at the case before defending his economic record.
However, the Prime Minister was later asked to correct this claim by Labour MP Clive Efford (Eltham), who said that the NHS “only partially” covers the cost of dialysis and added patients are only reimbursed after paying the bill.