A higher windfall tax cannot pay for everything

Editorial: There is a case for a modest increase in tax on the oil and gas companies

If the Labour Party is serious about its plans for government, it needs to be serious about the taxes needed to pay for them (Getty)

It may be possible to squeeze more money out of the oil and gas companies, but the windfall tax is not a cost-free solution to the energy crisis.

The New Economics Foundation (NEF) claims that ending the tax relief for investment by the energy companies would raise an additional £22bn over the next six years, increasing the yield from the existing windfall tax by half as much again.

When Jeremy Hunt, the chancellor, raised the tax on energy profits to 75 per cent in the autumn statement, the Treasury predicted that it would bring in £42bn over that period. That is a large sum, which would go some way to meeting the vast cost of the energy price guarantee, so it is tempting to propose a further visit to the magic money tree to raise even more.