Labour’s favourite think tank has called on ministers to temporarily raise income tax by two pence to offset rocketing energy costs brought on by the war in Iran.
In an intervention on Friday, Labour Together also called for a temporary cap on annual benefits and minimum wage increases, as well as the suspension of the triple lock.
While income tax was originally introduced as a temporary measure, the Labour think tank argued that squeezing taxpayers for yet more cash through the levy would generate £17 billion a year – and that ‘we can’t fund this with borrowing’ thanks to ‘the state of our public finances’.
They added it was ‘the progressive thing to do’ for a Labour Government desperate to claw back disaffected working-class voters.
Both the Tories and Reform condemned the proposals for piling more burden on to British taxpayers.
Shadow energy secretary Claire Coutinho said that moving costs from someone’s energy bill to their tax bill is ‘a sleight of hand’, while Reform UK shadow chancellor Robert Jenrick said that slapping even higher taxes on the British public is ‘completely absurd’.
This came as Energy Secretary ‘Red Ed’ Miliband was facing resounding calls yesterday to re-open North Sea oil and gas fields to help shore up Britain’s supplies.
But Mr Miliband refused to back down, arguing new exploration licences would ‘not take a penny off people’s bills’ and that the UK needed to get off the ‘fossil fuel rollercoaster’.
British manufacturers on Friday told the Energy Secretary the survival of British industry was at risk while ministers blocking drilling – and that ensuring the UK has its own energy reserves is ‘now vital’.
And Unite boss Sharon Graham, whose trade union this week cut its affiliation with Labour by 40 per cent, blasted Mr Miliband’s decision as an ‘act of monumental political self-harm’.
Last night, worrying reports emerged from the RAC that the price of petrol had hit an 18-month high, with the average price of a litre of unleaded rising by 6 per cent, or nearly 8p, since the start of the Iran conflict.
The Chancellor and Energy Secretary hauled petrol firm bosses and energy suppliers into Downing Street on Friday to ensure drivers are not left paying ‘over the odds’.
But in an embarrassment for the Government, the Petrol Retailers Association (PRA) threatened to pull out the meeting, saying comments from ministers about ‘price gouging’ and ‘ripping off’ motorists had caused retail staff to be abused at the pumps.
Ignoring calls for renewed North Sea drilling, Mr Miliband instead unveiled plans on Friday to speed up nuclear power generation across the UK.
The Energy Secretary insisted the UK needs ‘to go further and faster to build the clean energy we need to get off volatile fossil fuel markets and deliver energy security for our country’.
‘A crucial part of this is ensuring that we speed up the building of infrastructure in a way that reduces costs as well as delivering better outcomes for nature,’ he added.
But while the Tories have committed to a 2050 deadline of generating 24 gigawatts’ of electricity from nuclear power, Labour has not recommitted to the target – leaving any cost-savings for the taxpayer in doubt.
And on Friday CPRE chief executive Roger Mortlock accused the Government of ‘leaving the door to weaker safeguards for nature and protected landscapes’ through its nuclear plans.
He said: ‘Instead of principled policymaking, today’s announcement has the ring of another political fudge.’
