Tesco’s chairman has backed imposing a windfall tax on energy firms to help people who are feeling “extremely stretched” by the cost of living crisis.
John Allan said there was an “overwhelming case” for a levy on the excess profits being enjoyed by companies as a result of the global spike in prices.
The Labour Party has repeatedly called for a one-off tax on firms’ profits to help ease the pressure on household bills, but Boris Johnson has repeatedly ruled it out, insisting it would prevent investment in green energy schemes.
Last week Shell renewed demands for a windfall tax on the sector after it posted profits of £7.2billion for the first three months of 2022.
It followed BP, which announced an underlying profit of £5bn earlier this month, more than double last year’s figure and its biggest surplus in over a decade.
Asked what he would like to see in the Queen’s Speech, John Allan told BBC Radio 4’s Today programme: “First of all, I think action to help people cope with a very, very sharp increase in energy prices.
“It’s harder for people to mitigate energy than it is with food, and I think there’s an overwhelming case for a windfall tax on profits from those energy producers fed back to those most in need of help with energy prices.
“I think that would be the single biggest thing that could be done.”
Allan said he had also seen Tesco customers asking checkout staff to stop scanning their items once their bill had reached a certain threshold.
“I was hearing for the first time for many years of customers saying to checkout staff, ‘stop when you get to £40’ or something,” he said.
“They don’t want to spend a penny over that, as opposed to having everything checked out.
“So I think a lot of people are feeling, you know, something of a pinch and lots of people are actually feeling extremely stretched.”
Chancellor Rishi Sunak recently told a Mumsnet event that while he was concerned a windfall tax could also put off investment in new oil and gas extraction, “nothing was ever off the table”.
But other ministers — including business secretary Kwasi Kwarteng and policing minister Kit Malthouse — have voiced their opposition to the move.
Malthouse told BBC Breakfast on Tuesday: “We have to be very careful about the talk of windfall taxes.
“Don’t forget these are global companies who make their money all over the world and pay tax all over the world, and we don’t want to deter investment.
“They do already pay premium tax, double what other companies pay.
“And what we’ve seen over the last year or so, certainly, since the Ukraine crisis, is that we need investment in our domestic energy production, so we want to help them and stimulate them to do that.”
However, Allan said he believed energy companies were “expecting” to be taxed and said he did not believe “they would actually be much fazed by it”.
Allan also took aim at the government’s decision to increase national insurance by 1.25 percentage points, saying it was “hitting people on modest incomes disproportionately and it’s absolutely the wrong time to do it”.
“If I were in government, I’d roll that back.”