Rachel Reeves is facing calls to raise taxes on businesses 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, groups including Greenpeace UK, the National Education Union, and Tax Justice UK said energy companies, banks, defence firms, and tech businesses stand to benefit from the conflict. They urged Labour to strengthen its existing North Sea windfall tax and introduce new levies on other sectors.
The letter stated: 'We urge you to make this crisis a turning point for the UK. Taking bold action to systemically reform our tax system and invest in our energy security will build resilience in our economy to withstand future shocks.'
Reeves has warned companies she will not tolerate 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 due to run until 2030, but Reeves had planned to ease it before the attack on Iran on 28 February.
Labour peer Richard Walker, chair of Iceland supermarkets, urged Starmer to explore a profits cap on energy and fuel firms. Faiza Shaheen of Tax Justice UK said: 'Spain has already frozen rents, yet our government fails to show urgency. The chancellor needs to get a grip to help people struggling.'
A Treasury spokesperson said: 'The UK already has additional sector-specific taxes on banking and energy. We want to avoid companies exploiting this crisis to unfairly hike prices, which is why we’re bringing in a new framework to clamp down on price gouging.'
