Sir Keir is in a flap trying to work out how to attack Liz’s new energy policy. There are plenty of arguments against it being posed by her free market allies, though given the Government’s policy is much grander than Labour’s own price freeze, it leaves very little room for attack from the left. During today’s debate, Sir Keir came close to misleading the House. His argument, that corporations should pay for the energy bailout, heavily implies to voters that the only way we get money out of energy firms’ profits is via a windfall tax. This is obviously untrue. Energy firms already pay 65% tax on profits, and any rise in profits leads to increased tax receipts…
Labour frontbenchers have been claiming this week that a windfall tax should pay for the energy price freeze, though Labour’s own sums accept the current windfall tax funds just £8 billion of their £29 billion spending proposals. Asked by Tory MP Jacob Young precisely what tax level on energy giants’ profits should be set at, Sir Keir totally dodged the question. Asked again by Mark Harper how high he wants a windfall tax to go, he once again ignored the question. Almost implying this is ill-thought out politicking…
Mark Harper also raised another key point. During his statement Starmer referred to £170 billion of unexpected excess profits by energy giants – a figure being repeated by Ed Miliband and Angela Rayner among others. This £170 billion, Labour implies, is completely up for grabs if only the billionaire-boot licking Tories would take the opportunity to tax it. Unfortunately for Labour this is also wrong. The £170 billion figure is global profits, only a fraction of which are registered in the UK and therefore taxable. As Joe Armitage points out, the figure for the UK, projected in 2022, is around £40 billion. Which is already, as stated, taxed at 65%.
GB News’ Tom Harwood explained this point well:
'Can the UK government really raise £170 billion in tax just like that? The answer, bluntly, is no.'
— GB News (@GBNEWS) September 8, 2022
Tom Harwood says Keir Starmer's implication that £170 billion could be raised in a windfall tax is 'nothing short of misinformation.' pic.twitter.com/NAp71fPZVi
“In total, extra profits of oil and gas giants this year amount to just £14 billion.” Even if all of that were taxed, it wouldn’t be a drop in the ocean of the government’s £100 billion-plus spend, and would certainly damage investment in energy extraction if taken off them. The commentariat loves to imply that Sir Keir’s some sort of details-obsessed political centrist. By the looks of it he’s got Diane Abbott doing his sums…
