Truss vows no windfall tax for energy firms as Boris accused of doing nothing to help families pay soaring bills

12 August 2022, 02:00 | Updated: 12 August 2022, 07:17

Liz Truss has said she is against a windfall tax on energy companies
Liz Truss has said she is against a windfall tax on energy companies. Picture: Alamy

By Emma Soteriou

Tory leadership frontrunner Liz Truss has vowed not to put a windfall tax on energy firms as it could "bash" business.

The Foreign Secretary said she would "absolutely" not support a windfall tax.

It came after Boris Johnson refused to step up and help struggling families with the soaring cost of living on Thursday, following crisis talks with energy companies.

Bosses were warned to either invest more in renewable energy and North Sea gas or face another windfall tax, it is understood.

Speaking to Tory members at the Cheltenham hustings, Ms Truss explained: "I think it's a Labour idea.

"It's all about bashing business, and it sends the wrong message to international investors and to the public."

With a stark new warning that energy bills could top £5,000 by the spring, the cost-of-living issue continues to dominate the exchanges in the battle to succeed Boris Johnson.

Read more: Boris Johnson refuses to help with soaring bills after crisis talks with energy firms

Read more: Increase investment or face fresh windfall tax, govt warns energy firms

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Mr Johnson earlier warned energy companies that sky-high bills will damage their business, speaking at a round table with the electricity sector.

Chancellor Nadhim Zahawi and Business Secretary Kwasi Kwarteng met executives along with the the acting PM but came out with no solutions to the growing crisis.

Firms said they would "work closely" with the government to offer more support for struggling households.

And Mr Johnson said he would continue to urge the energy sector to ease the cost of living pressures on people.

One industry source briefed on the talks said it was "clear the windfall tax is not a preferred option for anyone – ministers or electricity companies".

Bosses pictured entering No10 included Michael Lewis, the CEO of E.ON, Tom Glover of RWE, and Clare Harbord of power generator Drax.

Nick Ferrari slams earnings of energy bosses amd cost of living crisis

With Mr Johnson leaving the issue for his successor to deal with, it was all to play for at Thursday's hustings as both Ms Truss and Mr Sunak took to the stage.

As well as the windfall tax, Ms Truss also addressed the idea of offering direct payments to households.

She refused to rule the option out but instead stood by her tax-cutting plans, warning against "Gordon Brown economics".

Asked whether she was for or against "handouts", Ms Truss stressed that her "first preference" has always been to "reduce taxes".

She insisted she will not "write the Budget in advance".

Meanwhile, Rishi Sunak has since ramped up his promises to tackle the crisis as he seeks to gain ground on Ms Truss.

The former Chancellor said he is prepared to find up to £10 billion of extra support for those facing rising bills in the autumn - with a vision to cover the total cost for up to 16 million vulnerable people, according to The Times.

It said he valued his cut to VAT on energy at £5 billion, and would find the same amount again to go towards helping the most in need, as he warned: "You can't heat your home with hope."

Writing for the newspaper, Mr Sunak said: "People need reassurance now about what we will do and I make no apology for concentrating on what matters most."