Liz Truss has hardened her opposition to a windfall tax on the energy companies making huge profits as bills are expected to top £5,000 next year.
Speaking at a Tory leadership hustings on Thursday, the favourite to succeed Boris Johnson said profit is not a “a dirty word” as she dismissed the popular policy as “bashing business”.
On the same day, analyst, Auxilione, said regulator Ofgem could be forced to raise the price cap for the average household to £5,038 from next April.
It has led to further calls for the government to intervene beyond May’s windfall tax on the energy industry, which gave every UK household an energy bill discount of £400 but is now seen as insufficient as prices continue to soar.
But Truss said: “I absolutely don’t support a windfall tax (on the energy companies) because it’s a Labour idea and it’s all about bashing business. It sends the wrong message to international investors and the public.”
Truss told Tory members in Cheltenham: “I don’t think profit is a dirty word, and the fact it’s become a dirty word in our society is a massive problem.
“Now, of course, the energy giants, if they’re in an oligopoly, should be held to account, and I would make sure they’re rigorously held to account. But the way we bandy the word around ‘profit’ (as if) it’s something that’s dirty and evil, we shouldn’t be doing that as Conservatives.”
In recent weeks, the headlines have been dominated by Shell, BP and British Gas owner Centrica as they have announced bumper financial results.
BP revealed second-quarter profits more than trebled to a 14-year high. The oil giant reported underlying replacement cost profits – its preferred measure – jumping to a far better-than-expected £6.9 billion for the three months to June 30, up from £2.3 billion a year ago.
Centrica’s half-year profits soared five-fold to £1.3 billion, while Shell achieved a record second quarter result as adjusted earnings hit nearly £9.5 billion.
The recent surge in energy prices has been driven by wholesale prices, specifically the soaring cost of gas, first as a result of the reopening of economies as the Covid-19 pandemic receded and later Russia’s invasion of Ukraine.
By contrast, rival Rishi Sunak said if the Conservatives do not provide “direct support” to millions of vulnerable pensioners, the country “will never ever forgive us”.
He told Tory members at the leadership hustings: “Millions of pensioners this autumn and winter are going to have an extraordinarily tough time.
“They don’t have the ability to go out and work more hours. They’re already dipping into their savings in retirement.
“And as I said then and I’ll say it again, if we don’t provide direct support to millions of vulnerable pensioners, it will be a moral failure of this party and the country will never ever forgive us.”
Truss also said she opposes “Gordon Brown-style economics” and warned that increasing taxes will “choke off economic growth” and send the country to “penury”.