The Treasury is being urged to use a windfall tax on energy firms to help protect families hit by price increases – and ward off a “winter of discontent”.
Stephen Flynn, SNP MP for Aberdeen South, called for UK Chancellor Rishi Sunak to tax the excess profits energy companies are making in the wake of the crisis.
He suggests the taxes raised should be spent on helping people hit the hardest by rising energy bills.
It comes as the wholesale price of oil and gas rose by 70% since August and 250% since the beginning of the year.
The energy price cap is also set to rise by £139 a year from October 1 – only days before the UK Government’s £20 uplift to Universal Credit is due to be scrapped.
Something people ‘just simply can’t afford’
Mr Flynn said: “People in Aberdeen and across the north-east are facing enormous rises in their energy bills, while the Treasury will be raking in substantial tax receipts from the inflated price of gas.
“Governments across Europe are moving to access these revenues to directly support their citizens who are being hit by soaring energy bills and it’s absolutely something the chancellor should consider.
“Rather than hoovering up these tax receipts in the treasury, the chancellor must act to support households being wacked by colossal rises in utility bills – if he doesn’t, then he will be dealing with a new winter of discontent and that is something that people in the north-east just simply can’t afford.”
He will be dealing with a new winter of discontent and that is something that people in the north-east just simply can’t afford.
– Stephen Flynn MP
Mr Flynn said the tax receipts can be used to invest in the push to lower harmful emissions.
“This is a golden opportunity to harness this increased treasury revenue to finance a sustainable future for our energy sector and our energy security – such a move could be transformative to our region and deliver the vibrant energy transition that we all want to see here,” he said.
“The time to act is now and the Tories have no time to dither and delay – it’s time to step up to the plate and perform their moral duty to families the length and breadth of these islands.”
UK Business Secretary Kwasi Kwarteng earlier told MPs he is “not a fan” of using a windfall tax on energy companies, despite claiming all options are still on the table.
First minister ‘extremely concerned’
First Minister Nicola Sturgeon said she is “extremely concerned” about the impact rising energy bills will have on the poorest families in Scotland.
Speaking before an emergency meeting on Wednesday, she said: “I am extremely concerned about the rise in energy prices, the impacts on industry of the wholesale gas price rises but also the significant impact we may see on domestic consumers over this winter period at the same time as the UK Government is planning to take £20 a week away from some of the poorest families in the country.
“I want to ensure the Scottish Government is doing everything we can to try to deal with the impact of what is a very worrying set of circumstances.”
HM Treasury was approached for a comment.