Stark warning hits Boris over windfall tax as Tory says it almost cost Thatcher her job

Energy crisis has led UK to 'foothills of recession' says expert

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Tory MP John Redwood, who ran the No10 policy unit between 1982 and 1987, today warned Mrs Thatcher was almost booted out of office just two years into the job for her own tax policies. In a stark warning to Mr Johnson, he urged the Government against U-turning on its decision to reject demands for a windfall tax.

The Wokingham MP said: “The Thatcher years proved lower taxes bring in more tax revenue from growth in incomes and investments.

“They also proved in the first two years higher taxes with windfall taxes do a lot of damage and almost lost her the job as PM.”

He added: “Early Margaret Thatcher followed Treasury austerity and high tax policies.

“It plunged the economy into a very unpopular downturn.

“Then on advice from outside the Treasury, she eased the squeeze which worked.

“Those who use her name should understand the history.”

In November 1980, Mrs Thatcher’s Chancellor, Sir Geoffrey Howe, raised taxes on North Sea oil and gas producers.

The following spring, a windfall tax was also imposed on the banks.

The decision sparked outrage at the time, with Britain also suffering from recession and rising unemployment.

Mrs Thatcher was facing a coup from her backbenchers until the Falklands War saved her career.

After winning the 1982 election, Mrs Thatcher slashed taxes and oversaw rapid economic growth.

Mr Johnson and Rishi Sunak have faced pressure to impose a windfall tax on the excess profits of energy firms amid skyrocketing gas bills.

Shell, BP, Exxon Mobil and Chevron reported £22bilion in profits between them during the first three months of this year.

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Average energy bills increased by £693 a year in April to £1,971, with warnings it is set to hit as high as £2,750 in October.

Labour has led demands in calling for a windfall tax on energy firms to help reduce household energy bills.

Mr Johnson and Mr Sunak have for weeks resisted the calls to act, but ministers have suggested the Government may be changing its mind on the issue.

Chief Secretary to the Treasury Simon Clarke this morning said the Government had not ruled out a windfall tax.

He said ministers were preparred to take action if oil and gas firms failed to invest their profits into boosting capacity.

“If we don’t see that investment starting to materialise in short order, then obviously the government cannot rule out a windfall tax,” he told Times Radio.

“We don’t want to have to do this but if we don’t see the sector reinvesting these profits into something productive for the real economy then all options are clearly on the table.”

He added: “We are obviously looking at what needs to be done to support households at what is an exceptionally difficult time and a windfall tax is one of those options that is something that any responsible government would need to look at.”

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