The guardians of conservative orthodoxy have not been amused at all, with some saying it is “throwing meat at the socialists and it won't work”. But Boris Johnson, who had been resisting the move for months, was finally forced yesterday to announce an extraordinary tax on the outsized profits of oil and gas companies to help ordinary people pay their energy bills.
The Government, already up to its eyeballs in debt after the pandemic rescue plan, is going to take another 18,000 million euros out of the piggy bank, which will translate into almost 500 euros for each household, and 750 more for those who already depend on State subsidies, to whom the cost of living crisis can plunge into absolute poverty. Demand at food banks has increased markedly in recent months, according to the churches and charities that run them. Pensioners and the disabled will also receive additional benefits.
The bulk of the package will be financed with an extraordinary tax (windfall tax) of 25% on the profits of oil and gas companies, which, however, will be able to recover 90% of the money they invest in technological development in their sector. The administration is not ruling out also imposing an extra tax burden on power companies, which are also posting huge profits as inflation eats away at an ever-increasing chunk of taxpayers' paychecks.
Johnson, who is weathering as best he can the scandals in which he himself gets involved like a child splashing in puddles, feels trapped between two groups of voters that gave him an absolute majority two and a half years ago: on the one hand, the traditional Tories, for whom raising taxes is anathema, and on the other, former Labor supporters from the north of England, who are conservative on social, immigration and law and order issues but want redistributive investment from the state. The latter won with the aid of the pandemic and have done so again with the cost of living.
Boris Johnson's problem is that, whether he sides with the former or the latter, this is going to have an electoral cost, maximized by the widespread rejection of illegal parties in Downing Street during the pandemic. If he doesn't hand out aid, voters in the north of England are likely to return to the Labor fold in 2024. And if he grants them, with what that means in fiscal and public debt matters, the Liberals are going to eat up the ground in their traditional bastions in the south.
“We have a collective responsibility to those who are paying the highest price for the inflation we face,” Chancellor of the Exchequer Rishi Sunak, who this year has entered the list of richest people, told the House of Commons. of the country of the Sunday Times, with a family fortune of almost one billion euros.
The Bank of England forecasts inflation of 10% for the autumn, the highest in forty years, and it is estimated that an average energy bill will exceed three thousand euros per year, an unaffordable figure for many families.
