Rachel Reeves is facing calls to raise taxes on businesses generating “windfall” profits from the US-Israel war on Iran, with charities and unions arguing the revenue should fund emergency cost-of-living support for UK households.
In an open letter to Keir Starmer and the chancellor, groups including Greenpeace UK, the National Education Union and Tax Justice UK urged the government to strengthen the existing North Sea energy windfall tax and introduce new levies on banks, defence firms, agricultural commodities businesses and tech companies that stand to benefit from the conflict.
The signatories said the extra money could be used for emergency support and to invest in the UK’s resilience against future energy shocks. “We urge you to make this crisis a turning point for the UK,” the letter said, calling for systemic tax reform and investment in energy security.
Reeves has signalled that the government is ready to provide targeted help for households facing rising energy prices, and warned companies against profiteering. The UK already has an energy profits levy on North Sea oil and gas firms, due to run until 2030, but Reeves had been planning to ease it before the attack on Iran on 28 February.
Labour peer Richard Walker, the prime minister’s cost-of-living champion, also urged Starmer to explore a profits cap on energy and fuel firms. Faiza Shaheen, executive director of Tax Justice UK, said: “Spain has already frozen rents, yet our government fails to show urgency… The chancellor needs to get a grip.” A Treasury spokesperson pointed to existing sector-specific taxes and a new framework to clamp down on price gouging.
