“I think there is a strong argument to tax these profits fairly, given that energy companies are making extraordinary profits, as a result of prices that are elevated, in part, due to Russia’s invasion of Ukraine.”
That’s the reason Rishi Sunak gave for pushing through a windfall tax, speaking on BBC’s Breakfast show.
“What we wanted to do is take the time to get it right, so they we can continue to incentivise investment. So, the way we are doing this is with a new, very generous investment relief, so that those companies that do invest more, will pay less tax.”
When questioned on why the £400 discount on energy bills was available to all end users and not just those that need it the most, Mr Sunak said: “Three-quarters of that funding will go to those that are most vulnerable.
“We do know that many people are struggling on middle incomes as well, which is why we wanted to have a more universal element to what we’re doing – the £400, on top of the £150 council tax rebate that’s already been put in place.”
He explained that if the aid was only targeted at lower income households, some people would feel “they are missing out on support that they deserve.”
Wealthier citizens are also entitled to the same discount and those that own multiple properties are set to receive multiple sets of the £400 discount. In response to this, the Chancellor said: “When you’re trying to make policy that benefits tens of millions of people, there are only a couple of practical ways that you can do that.”
He conceded that “in an ideal, perfect, theoretical world” providing aid to those that don’t need it wouldn’t be necessary but to push the policy through, that step had to be taken.
Mr Sunak explained that he had donated his £400 to charity and urged other wealthy homeowners to do the same. “I’m sure you will join me in giving that money to charity,” he said on a second interview on ITV’s Good Morning Britain.
“People can judge me by my actions over the past couple of years, I’ve always tried to be responsive to the situation that the country and the economy is experiencing,” he concluded.