The Labour Party believes that we need to levy a windfall tax on oil and gas producers to help the millions of families facing the cost-of-living crisis.

We have known for months, even before Russia’s invasion of Ukraine, that a massive increase in energy prices was coming that will push millions of households into fuel stress. It is for this reason that we have supported calls for the Government to introduce a windfall tax on the profits of North Sea oil and gas producers. This would help fund a package of support for families facing the energy price crisis, including immediately reducing VAT on energy bills to zero and smoothing the costs of energy supplier failure – together saving most households around £200 – and increasing the warm home discount to £400 while extending it to nine million families.

Unfortunately, the Government has continued to reject this plan that would benefit all households immediately and take £600 off the energy bills of those on the lowest incomes. Instead, it announced measures worth only £350 off household bills – including £200 that will not come until October and that bill payers will have to pay back as a surcharge later, and a £150 council tax rebate that many pensioners and people on low incomes will not automatically be eligible for. With a £693 increase in the energy price cap, this will still leave families in Britain – including some of the poorest – paying hundreds of pounds more for their energy from April.

Furthermore, the Government’s plans load up future costs for households, rather than asking fossil fuel companies to make any extra contribution. The Government says it does not want a windfall tax on North Sea oil and gas producers, with a Cabinet Minister even describing them as “struggling”. Yet these companies are seeing soaring revenues, with Shell’s profits quadrupling to $20 billion while BP’s have reached an eight-year high of $13 billion.

The cost-of-living crisis is the biggest issue facing our country. Two million people went without food for a whole day in the past month because they could not afford to eat. Seven million families had to skip a meal, including nearly half of those on Universal Credit. This is both a social emergency and an economic threat, depriving our economy of the spending power it needs. In addition, the cost-of-living crisis comes on top of a decade of low growth that has left families and our economy vulnerable, facing high taxes and struggling public services.

This is why we will continue to support efforts to press the Government on this issue, as well as calls for action to keep energy bills low in the longer-term by accelerating home-grown renewables and getting homes insulated.