Boris Johnson pledges to protect vulnerable people during cost-of-living crisis

Cost of living: Sunak 'has to take action' says Reynolds

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Facing intense pressure to help struggling households, the Prime Minister insisted that, in a similar response to the Covid crisis, the Government would use its “firepower” to get the nation through. Speaking during a visit to Wales, Mr Johnson said he understood many people were facing a “very tough time”. He said: “I’m not going to pretend to you that we can magic away every single expense that people are going to face as a result of a global spike in energy prices.

“But be in no doubt that this will come down, we will get people through it.

Mr Johnson said markets would eventually adjust and prices would come down again, “and in the months ahead, we are going to have to do what we did before, we’re going to use our fiscal firepower that we built up to help”.

He added: “We are going to put our arms around the British people again as we did during Covid.”

Mr Johnson insisted he wanted to make sure Britain had a dependable energy supply to avoid future price surges.

He said: “I care deeply about the crunch now, but what we have to avoid also is future crunches and future spikes in the cost of energy.

“It is insane that this country is piping in electricity from the continent, from France. Crazy when we’ve got hydrocarbons of our own, that we’re continuing to take them from [Vladimir] Putin’s Russia.”

Mr Johnson has been opposed to slapping a windfall tax on oil and gas giants which have racked up soaring profits, but has agreed to look at the option.

Ministers and Tory backbenchers are also deeply divided over whether to introduce the one-off retrospective levy.

Critics say it sends out the wrong message to businesses looking to invest in the UK.

Brexit opportunities minister Jacob Rees-Mogg said it was wrong to raid the “honey pot of business” as a “panacea to the inflation problem”. He also argued charging North Sea firms would mean people paying more tax.

Mr Rees-Mogg said: “Retrospective taxation is difficult because you are changing the understanding of what people do when they invest.

“It’s difficult because tax on corporations ultimately falls on individuals anyway. It either falls on individuals because the companies, to maintain their net margin around the world, increase their pricing in the UK. Or it falls on individuals because the profit doesn’t fall through to the dividends that fund their pensions.”

Trade body Offshore Energies UK said a windfall tax would put investment and jobs at risk.

Chief executive Deirdre Michie said the Treasury would receive £8billion from the sector and another £5billion next year, on top of £370billion that has been paid over the last decade. She said: “We have identified up to £250billion of investment opportunity over all of the energies, but only a third of that is sanctioned.

“So if people start to feel this is not a good place in which to invest, they will take their investment elsewhere.”

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