Labor today accused the government of “getting it wrong” with its windfall tax on North Sea oil and gas companies, leaving loopholes the party calculates will cost the public purse £17 billion.
In a challenge to Jeremy Hunt, Labor is today tabling an amendment to the bill adopting the chancellor’s autumn statement, calling for him to spell out the full cost of windfall tax allowances for fossil fuel firms.
Shadow chancellor Rachel Reeves said the sums that could be raised by scrapping the allowance – as well as backdating the one-off tax to early 2022 and matching Norway’s 78% tax on its North Sea firms – was the equivalent of business of three years. for the UK wind industry and could pay for the insulation of 6 million homes.
Her comments came as pressure mounted on Rishi Sunak to lift the effective ban on onshore wind farms in England.
Some 32 Tories have now signed a rebel amendment to allow land development, with former cabinet ministers Nadine Dorries, Wendy Morton and Julian Knight bringing the number close to the number needed to inflict Mr Sunak’s first defeat as premier.
And a rival Labor amendment could go further, requiring local authorities to identify potential sites for turbines.
Downing Street played down suggestions of an imminent reversal of restrictions on onshore wind farms, which are so onerous that planning applications have fallen to almost zero since they were introduced in 2015.
Conservative MP and former government whip Craig Whittaker told the Commons that the policy was “stifling growth, stifling our march to net zero and stifling our quest for security of supply”.
And shadow climate change secretary Ed Miliband said the policy was adding £150 to average household energy bills.
By doubling the UK’s onshore wind capacity, the government could save energy customers a combined £16 billion by the end of the decade, he said.
But Energy Secretary Grant Shapps responded that it would continue to be the case that wind farms could only be located on land “where there is local agreement”.
Miliband blamed Tory leaders since David Cameron for pampering “dinosaurs” on the Tory benches who have stopped the development of a technology seen by environmentalists as the cheapest and cleanest source of electricity for Britain.
Mr Sunak himself has vowed to uphold the ban as he battles for the votes of Conservative Party members during this summer’s leadership contest.
“The ban on onshore wind in England, which they put in place in 2015, has increased the bills for every family in this country by £150 each,” Mr Miliband said. “And keeping the ban in place until 2030 would mean customers paying £16bn more on their bills compared to the target of doubling onshore wind.”
In tabling the exceptional work tax proposals, Ms Reeves accused the government of making workers foot the bill for rising energy prices.
It has released analysis which suggests scrapping quotas which save North Sea companies 45p for every pound they invest in fossil fuel extraction would raise £10.6bn over the six-year duration of the temporary exceptional tax .
And she said the government could have raised £2.6bn by following Labour’s plans to backdate the levy to early 2022 and £3.6bn by setting it at the Norwegian level of 78% instead of 75 %.
“Britain deserves a government that will make fairer choices in the interests of working people,” said Ms Reeves.
“When it comes to the next election, the question people will be asking is this: are my family and I better off under the Tories?
“With elections like this, the answer will be no.
“Labour would make fairer choices – taxing war windfalls fairly, instead of pouring into workers’ pockets first.”