Labour pressures Tories to vote for windfall tax to 'protect 500,00 children from poverty'

Labour is forcing a windfall tax vote in the Commons this evening. Credit: Parliament

Tory MPs are under pressure to support Labour's vote for a windfall tax to address the cost-of-living crisis, with the opposition saying failure to act could see 500,000 children fall into poverty.

Labour says a one-off windfall tax on the huge profits of oil and gas firms could raise enough cash to give struggling families £600 in support to deal with soaring costs.

The party is forcing a vote on Tuesday to amend the parts of the Queen's Speech which deal with "tackling the short-term and long-term cost of living increases", to include a policy on further taxing energy producers.

Prices in the UK are rocketing, with household bills having risen by around £700, National Insurance is rising by approximately £130, inflation is predicted to reach 10% - at the same time that energy giants BP and Shell are raking in bumper profits.

Analysis by Labour on Sunday showed the expected profits of North Sea oil and gas firms in 2022/23 are "higher than the combined rise in energy bills for every household in the UK".

Meanwhile, the cost of diesel hit a record high of 179.7p on Tuesday and petrol prices, at 165.1p, almost broke the previous record set before a 5p cut in fuel duty was announced.

Labour shadow minister Jon Ashworth said "the government has got to do more to support people", as he urged Tory MPs to back Labour's amendment on a windfall tax.

"Not acting means 500,000 children are going to be pushed into poverty, that's the biggest single increase in child poverty since 1994," the shadow work and pensions secretary added.

Why does Labour want a windfall tax? Jon Ashworth explains

Last month, the Resolution Foundation, an independent think-tank focused on improving the living standards, said: "The scale and distribution of the cost of living squeeze, coupled with the lack of support for low-income families, means that a further 1.3 million people are set to fall into absolute poverty next year, including 500,000 children."

Mr Ashworth also urged the government to announce further support for pensioners, who he said will lose £427 from their yearly income without support.

He said ministers should "bring forward some of next year's budgeted for increases in the pension and things live Universal Credit to today - if they don't do that pensioners are seeing the biggest real terms cut 50 years in the value o their pension.

Can Labour defeat the government and force a windfall tax?

As with all votes in the Commons, the odds are stacked against the opposition because of the government's huge majority.

Labour won a vote on a windfall tax in February but that was because Conservative MPs abstained.

That would not be the case with an amendment to the Queen's Speech, which MPs are required to vote on.

The wording of the amendment seeks to add the following clause to the wording of the Queen's Speech: “But respectfully regret that the Gracious Speech fails to announce a windfall tax on the profits of oil and gas producers, in order to provide much-needed relief from energy price increases for households.”

Rather than explicitly forcing the government to bring in a windfall tax, the amendment would put on record the regret from MPs that the policy was omitted from the Queen's Speech.

But even if some Tories do support the motion, it is highly unlikely that 75 of them - the number required to defeat the government - would rebel.

Ed Miliband, shadow climate change and net zero secretary, said of Tuesday's vote: "As energy bills rise by record amounts for millions of families, it is shameful that Boris Johnson and Rishi Sunak still refuse to back a windfall tax that could help tackle the cost-of-living crisis.

"Today, Labour will give MPs another chance to support our one-off windfall tax on oil and gas producer profits to bring down bills.

"This fair and principled measure now has support from business, trade unions, across the political spectrum and most importantly, the overwhelming majority of the public.

"Conservative MPs must now join the British people in calling for a windfall tax - or explain why they continue to oppose measures that would ease the cost-of-living crisis."

The Northern Ireland secretary said the government would keep the policy "under review" if oil and gas companies did not invest in new energy infrastructure.

Brandon Lewis made the comments after being told on ITV's Good Morning Britain that BP bosses had said they did not object to a windfall tax.

"I think some of the predictions that we've seen Labour put through about what a windfall tax could bring in is somewhat over-inflated," said Mr Lewis.

"But look, the reality is that we want businesses investing. You're quite right, I understand what the chairman of BP outlined, but that is one company.

"The chancellor, the prime minister have to look at the entire sector.

"The chancellor, I think in just the past couple of days, has outlined that he wants to see those investments coming through but he will keep this under review.

"If we don't see the investments coming through, then he takes nothing off the table."

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