Citing Spain, France and Greece as examples, British Treasury Secretary Rishi Sunak confirmed the creation of a tax “to temporarily tax the profits of energy companies.” The British Government hopes to raise 5,000 million pounds (about 6,000 million euros) with a surcharge that will reach up to 25% of profits, offset by tax exemptions on 90% of investments.
“We have not wanted to be ideological, but rather pragmatic, and that is why we have chosen a middle path,” Sunak told the House of Commons, backed by “premier” Boris Johnson, who wanted to spread a smokescreen over the scandal of ” Partygate” and take action on the issue that Britons are most concerned about: the cost of living crisis.
British households will predictably pay 2,350 euros for their electricity bill this year, compared to the 760 euros they paid in 2021. The spectacular rise in rates contrasts with the record profits obtained by companies such as Shell (which tripled its results in the first quarter of 2020 and exceeded 8,700 million) or BP (which doubled its numbers to reach 6,000 million euros).
After several weeks resisting the outcry in favor of what is popularly known as a “windfall tax”, Boris Johnson finally gave in, days after his Energy Secretary Kwasi Kwarteng publicly ruled out measure.
“This government will not sit idly by and will protect the interests of those who are fighting hard in this situation and of those who are running too great a risk,” stressed Sunak, who anticipated the destination of 18,000 million euros (paid in part by the new tax) in subsidies for less favored families, who could access 750 euros per household in state aid.
The most controversial point of his speech, and the one that caused a notable hoarseness in the seats of the “Tories”, was the tax on extraordinary profits for electricity companies. Sunak bullied the reference to the “rain tax on profits” in his own way and preferred to use the euphemism of “temporary surcharge on energy benefits.”
The treasury secretary blamed post-pandemic inflationary trends, supply problems and the war in Ukraine as contributing factors to the price spike that is pushing millions of British families to the brink.
“France, Spain and Greece have already taken measures”, declared Sunak, when anticipating the new “provisional” tax, criticized in advance by the companies for considering that it could mean a halt to investments: “We are going to make sure that the companies continue to invest, and that’s why we’re going to provide exemptions for 90% of the money invested at the same time.
Opposition Labor leader Keir Starmer criticized the Johnson government for having responded too late, with inflation already at 9% for the first time in 40 years due to rising energy, transport and food prices. Labor and the Liberal Democrats congratulated themselves in any case for having won “the battle of ideas” and having finally achieved the impetus for a measure they had been calling for for months.
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