Taxing oil and gas companies: Rees-Mogg warns Sunak that no tax is ‘economically free’ | Political news

One of the government’s most loyal ministers has warned that taxes levied on oil and gas companies will not be “economically free”.

Tax announced by Prime Minister Rishi Sunak as part of a £21 billion support package aimed at helping people cope with the rising cost of living.

But Jacob Rees-MoggThe minister in charge of Brexit opportunities and government efficiency, told Sky News that all taxation has economic consequences.

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“People need to understand that there’s no tax you can do that’s economically free,” he said.

“It doesn’t matter which tax, it will have economic consequences.

“Whether it’s a slurry tax, or it’s an excess profit tax, there’s an economic consequence.

“There is no free tax density that governments can impose.

“So as long as they raise taxes, knowing it will have economic consequences, which the prime minister does, it’s a matter of choosing between one form of revenue increase and another.

“Ultimately, there’s no tax-free way of spending. It’s today’s tax, or tomorrow’s tax through borrowing.”

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Mr. SunakTaxes on oil and gas companies also face Criticism from CBI – which suggests taxes can discourage investment – as do the roadblocks of the Conservative Party, where MP Richard Drax accused the prime minister of “throwing red meat to the socialists”.

The tax does not apply only once as it will only be phased out gradually “if oil and gas prices return to historic highs” and could be in place until the end of December 2025 – when “the term sunset” will end the tax.

Measures announced by the prime minister in the Commons on Thursday include a one-time £650 allowance for low-income households, paid in two installments in July and in autumn at a cost of 5.4 billion board.

Pensioners will also receive a £300 payment in November/12 alongside a winter fuel payment at a cost of £2.5billion, while £150 will be paid in September to recipients disability allowance.

Mr Sunak announced that £5bn of the bid would be paid with tax proceeds from the profits of the oil and gas giants and around £10bn would be covered by further borrowing.

The Prime Minister has tried to avoid calling his plan for 25% energy profits a “wind tax”, as he has been accused by Labor of having been embroiled in “stones and shouting” into a policy rollback. The Opposition spent months calling for the cause.

However, Simon Clarke, secretary of the Treasury, conceded it was a tax hit, although one he said included a “carefully calibrated offer” due to tax breaks for small businesses. The company invests in oil and gas production in the North Sea.

In announcing his financial package in the Commons, Mr Sunak told MPs it was worth £15bn.

But officials later admitted that there was a £6 billion hidden cost to the announcement, amounting to £21 billion.

That’s because over the next five years the original £200 rebate on energy bills, announced in February, has doubled and been converted into a subsidy by the prime minister on Thursday, will no longer be returned by the consumer as originally planned.

Mr. Sunak’s announcement came a day after Sue Gray’s damn report into lip-locking parties in Downing Street, presenting naked details of drunken parties, fights and karaoke in the heart of government at the time COVID-19 regulations were in place.

Chancellor Rishi Sunak will speak to Sky News about his £21bn support package just after 7am this morning