Rachel Reeves is facing calls to raise taxes on companies making “windfall” profits from the US-Israel war on Iran, with charities and campaigners urging the chancellor to use the revenue for emergency cost-of-living support.
In an open letter to Keir Starmer and Reeves, organisations including Greenpeace UK, the National Education Union and Tax Justice UK said energy companies, banks, agricultural commodities businesses, defence firms and tech firms stood to benefit financially from the conflict. They urged Labour to strengthen its existing North Sea energy windfall tax and introduce new levies for these sectors.
The group said the extra revenue could fund emergency support for households and invest in the UK economy’s resilience against energy shocks. “We urge you to make this crisis a turning point for the UK,” the letter stated.
Reeves has signalled the government is ready to provide targeted help amid surging energy prices since the war began. She has warned companies against profiteering, putting the Competition and Markets Authority on notice to crack down on price gouging.
The UK already has a windfall tax on North Sea oil and gas firms, the energy profits levy, due to run until 2030. However, Reeves had planned to ease the tax before the US and Israel attacked Iran on 28 February. Richard Walker, Labour peer and chair of Iceland supermarkets, has urged Starmer to explore a profits cap on energy and fuel firms.
A Treasury spokesperson said: “The UK already has additional sector-specific taxes on the banking and energy sectors. We want to avoid a situation where some companies choose to exploit this crisis to unfairly hike prices for working people.”
