Prime Minister Boris Johnson’s conditionally conservative government will impose an unexpected 25 percent tax on oil and gas companies to subsidize the population, after months of ridicule by the left-wing opposition Labor Party for proposing the same proposal.
Finance Minister Rishi Sunak has announced that the government will impose a £5bn emergency tax on energy companies to provide an additional £200 in energy savings to households tested in the UK.
In practice, this means that as we support the public more, we must consider the fairest way to finance nearly all of these expenditures as much as possible. ”said Sunak. in the House of Commons. Wednesday.
“The oil and gas sector is making incredible profits, not as a result of recent changes in risk thinking, innovation or efficiency, but partly as a result of the sharp rise in world commodity prices that led to war with Russia. IT. The reason why I sympathize with this argument. these gains will be taxed fairly,” he admitted.
Noting that there is a “reasonable middle ground” in taxing energy companies, Sunak said, “We don’t need to be ideological about this, we need to be pragmatic. You can both tax extraordinary income and direct investment. Therefore, like previous governments, including conservatives, we need to temporarily increase energy revenues. We will apply a targeted tax.
Former central bank chief economist admits high inflation may last for several years https://t.co/Rqa5SUI9GK
– Breitbart London (@BreitbartLondon) 10 May 2022
The Chancellor said the government has written an expiration clause into the law, meaning that the 25 percent income tax will be abolished once incomes return to historically more normal levels. He added that the government will also offer “new investment incentives” to oil and gas companies to encourage them to reinvest profits.
From the taxes collected, around eight million low-income households will receive a lump sum of £650, retirees will receive an allowance of £300, and previous energy subsidies will be doubled to £400, with no need to pay. returned to government.
However, government aid will not justify the rise in energy prices, as national energy regulator Ofgem announced this week that it expects another increase in energy limits in October. The regulator estimates it will raise the threshold, a socialist price cap initiative designed to cut costs, from £1300 last October to £2,800 this fall.
Despite calling themselves low-tax “Thatcherist” conservatives, the Conservative government under Prime Minister Boris Johnson and Chancellor Rishi Sunak has placed the highest tax burden on the population in the last seven decades.
In total, the Conservative Party has increased taxes 1034 times since it came to power in 2010 https://t.co/ZHxC806e1y
– Breitbart London (@BreitbartLondon) September 5, 2021
The decision to impose additional taxes on oil and gas companies has long been ridiculed by the Conservative leadership, while the prime minister himself mocks left-wing Labor leader Sir Cyrus Starmer for proposing to questions of the prime minister last Wednesday.
“There is nothing original in the business tax work plan, nothing remarkable. They want to tax the business every day, all the time,” Johnson said.
The timing of the announcement is also questionable, as it follows Sue Gray’s report of violations of quarantine restrictions by the prime minister and staff at 10 Downing Street on Wednesday, and giving money for taxes and expenses could provide the government with a popular talking point. to divert attention from the scandal.
While a contingency tax on oil and gas companies may become popular in the short term, the impact of such a tax may be less positive as the costs are likely to be passed onto consumers rather than the pockets of high-paid executives. long run. In fact, petrol and diesel prices, which hit record highs of £6.44 ($8.12) and £6.85 ($8.64) respectively on Wednesday, could rise again after the tax is introduced. .
There are also warnings that government aid will boost inflation, which hit a 40-year high of nine percent this month.
Paul Johnson, director of the Financial Research Institute, said on Thursday: “I think we need to be careful… Putting tens of billions of dollars into the economy during a time of high inflation can create more demand and make the economy more sustainable. Economic inflation.”
Cost of living crisis: UK inflation hits 9 percent, highest in 40 yearshttps://t.co/kUeBKoGXNo
– Breitbart London (@BreitbartLondon) 18 May 2022
Source: Breitbart
