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The British government was unveiling a package of help on Thursday to ease a severe cost-of-living squeeze, a day after British Prime Minister Boris Johnson vowed to “move on” from months of scandal over parties in government buildings during COVID-19 lockdowns.
Treasury chief Rishi Sunak was due to outline new measures including a windfall tax on oil and gas firms’ bumper profits. The 10 billion-pound ($12.5 billion) package is also likely to include a rebate on energy bills for millions of people.
A windfall tax would be a U-turn for the Conservative government, which has previously said such a levy would deter investment in the U.K.’s energy sector.
Prime Minister Boris Johnson has said a windfall tax would be “totally ridiculous” and would “raise prices for consumers.”
But the government is under pressure to act as skyrocketing energy and food bills drive millions in Britain into financial hardship.
U.K. inflation hit 9% in April, the highest level in 40 years, and millions of families saw their annual energy bills jump by 54% the same month. amounting to an extra 700 pounds ($863) a year on average for each household. Britain’s energy regulator said this week that domestic energy bills could shoot up again by another 800 pounds a year in the fall, as Russia’s war in Ukraine and rebounding demand after the pandemic push oil and natural gas prices higher.
The economic announcement comes as Johnson’s government tries to turn a page after an investigator’s report slammed a culture of rule-breaking inside the prime minister's No. 10 Downing St. office.
Civil service investigator Sue Gray described alcohol-fueled bashes held by Downing Street staff in 2020 and 2021 when U.K. residents were barred from socializing, or even from visiting sick and dying relatives, because of coronavirus restrictions. She said the “senior leadership team” must bear responsibility for “failures of leadership and judgment.”
The prime minister said he was “humbled” and took “full responsibility” -- but insisted it was now time to “move on” and focus on Britain’s battered economy and the war in Ukraine.
Johnson still faces an inquiry by a House of Commons standards committee over whether he lied to Parliament when he insisted no rules had been broken in Downing Street. Ministers who knowingly mislead Parliament are expected to resign.
The “partygate” scandal leaves Conservative lawmakers in a quandary: try to topple their leader amid a war and financial crisis, or stick with a prime minister whose perceived willingness to flout rules he applies to others has caused public outrage.
Under party rules, a no-confidence vote can be triggered if 15% of party lawmakers — currently 54 — write letters calling for one.
If Johnson lost such a vote, he would be replaced as Conservative leader and prime minister. It’s unclear how many letters have been submitted so far, but the number is growing.
Two more Tory legislators, John Baron and David Simmonds, called Thursday for Johnson to resign.
Baron said Johnson’s previous claim “that there was no rule-breaking is simply not credible,” and therefore he had misled Parliament.