Walsall MP criticises 'Government incompetence' over failure to introduce windfall tax

Valerie Vaz said the one-off taxation on oil and gas companies – who have boasted sizeable profits – could raise £2 billion which could off-set the current situation.

But the move has already been rejected by the Government, who have voted down a Labour motion on the issue, amid concerns over future investment in the UK.

And although ministers have so far resisted calls for the windfall tax, Prime Minister Boris Johnson and his cabinet are said to be reportedly split over the issue.

Ms Vaz, who represents Walsall South, said the move was the "best way to ease people out of the cost of living crisis" as she criticised the Government's inaction.

She said: "Living standards are set to fall by the largest amount in a single year since records began in the 1950s according to the Office for Budget Responsibility. The Resolution Foundation have predicted the average household will be £1,200 worse off this year.

"The oil and gas companies have said they have “more cash than we know what to do with” and BP’s CEO has said that a windfall tax would not affect any of their investments.

"Money is available to support people. The Government lost £8.7 billion in 2020/21 on PPE that was unusable, past its sell by date, or overpriced, and lost £11.8 billion to fraud through Covid support schemes. The Government’s own Minister for counter-fraud Lord Agnew said that the early months of the pandemic were 'happy days if you were a crook'.

"My constituents are faced with an increase in mortgages, fuel prices, food prices and energy costs; they are all going up. Our constituents deserve better. This may be a new Gracious Speech (Queen's Speech), but it is the same old Government incompetence."

The MP said the tax could raise £2 billion which could be used to cut average energy bills by £200 per household by cancelling VAT on bills for a year – and up to £600 to households most in need of support by expanding the Warm Homes Discount to nine million people.

Meanwhile, Prime Minister Boris Johnson has said "no option is off the table" to deal with the rising cost of living, but added: "I'm not attracted, intrinsically, to new taxes" in response to pressure to introduce a windfall levy on oil and gas firms.