Jacob Rees-Mogg shares concerns on impact of windfall-tax
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Minister of Brexit Opportunities and Government Efficiency Jacob Rees-Mogg showed concern on the impact of a windfall tax on energy giants to tackle current energy crisis and firmly said the tax “does not help the cost-of-living crisis”. “[Windfall tax] is not this magic wand answer”, he claimed and warned “it could create a further inflation”. Referring to initiatives promoted by the government to fight the current crisis such increasing the national living wage, Mr Rees-Mogg added “things have been done to help people”, but warned “solutions to inflation are long term and are the ones that require decisions that are not immediately popular”.
Mr Rees-Mogg said: “I wonder what the purpose of the windfall tax is.
“There’s this assumption that windfall tax helps the cost-of-living crisis.
“It doesn’t and what it does is raising a bit of tax.
“Tax is not a cost free opportunity economically.
“Corporations are not a honeypot in which governments can pick into or dip into.
“Global corporations pay more tax.
“It will look across the world and its net margin and it will try and achieve that over an economic circle.
“And if it’s gaining a lower net margin in one country or another, it will raise prices to get back to its net margin.
“So this proposed windfall tax could create a further inflation.
“So I’m not sure that it is this magic wand answer.”
He also added: “There are a number if things that have been done and continue to be done [by the government].
“First of all, a billion pounds to be made available to local councils and the advantage of this is that local councils can be very direct and target the support.
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“There’s been an increase in the national living wage, so that’s worth 1,000 pounds to people in full-time work.
“There’s been a reduction in the Universal Credit withdrawal with another 1,000 pounds to people on Universal Credit.
“So things are being done to help people directly who are the least well off, and this is very important because the solutions to inflation as a structural economic issue are long term and are the ones that require decisions to be made that are not immediately popular”.
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