Rachel Reeves is facing calls to raise taxes on businesses making “windfall” profits from the US-Israel war on Iran, with charities and unions 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 firms stand to benefit from the conflict.
The organisations called for the government to strengthen its existing windfall tax on North Sea oil and gas and introduce new levies on other sectors. They argued the extra revenue could be used to help households and invest in the UK’s resilience against energy shocks. “We urge you to make this crisis a turning point for the UK,” the letter said, calling for systemic tax reform.
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 an energy profits levy on North Sea firms, due to run until 2030, though Reeves had been planning to ease it before the attack on Iran on 28 February.
Pressure is mounting from across the political spectrum. Richard Walker, a Labour peer and the prime minister’s “cost of living champion”, 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 to help people struggling.”
A Treasury spokesperson said the UK already has sector-specific taxes on banking and energy, and is introducing a framework to clamp down on price gouging, alongside a Fuel Finder tool for drivers.
