LABOUR has suggested imposing a windfall tax on North Sea oil and gas producers – with the funding used to reduce household energy bills by an average of £200 to help solve the cost of living crisis.
The party’s £6.6 billion plan would include removing VAT on domestic energy bills for a whole year, as well as expanding and increasing the warm homes discount for those most at risk.
The fossil fuels producers would be forced to contribute £1.2 billion to help fund the proposals, through a year-long increase to their corporation tax of 10 percentage points.
Shadow chancellor Rachel Reeves blamed UK ministers for creating a “price crisis” by responding to surging wholesale energy costs with “dither and delay” as she set out her plan.
The UK Government is under increasing pressure to act, with experts predicting a 50 per cent hike to bills in April, meaning an average household paying about £700 more per year.
Labour says its proposal would save most households about £200, while targeted support to low earners, pensioners and the squeezed middle would save them £600.
It would spend an extra £3.5 billion on the warm homes discount, to increase it from £140 to £400 per year, while pledging to double the number of households eligible to 9.3 million.
VAT would also be removed from household energy bills for a year from April, six months longer than Labour has previously called for, at a cost of about £2.5 billion.