Britain’s economy contracted in March as consumers cut back on spending in the face of the rising cost of living, the latest official figures show. My colleague Larry Elliott has the story here.
And Graeme Wearden has reaction and analysis on his business live blog.
Good morning. Boris Johnson is chairing an awayday meeting of cabinet in Stoke-on-Trent later and the cost of living crisis is likely to be high on the agenda. Ministers have always been clear that further significant financial measures to help people are planned for later this year but, with all wings of the Conservative party demanding action sooner, some sort of ‘big bazooka’ intervention may be more immediate.
This morning the Daily Mail reports that the Treasury has started looking at options for a windfall tax on energy companies – something Labour and other opposition parties have been demanding for months. In their story Jason Groves and Mark Shapland write:
Multiple sources said the idea of a tax grab was ‘back on the table’ to help families with the cost of living crisis without pushing public borrowing even higher.
One insider said that a one-off levy was a ‘no-brainer if the chief executives themselves are saying they have no problem with it’.
Both Mr Sunak and Boris Johnson are understood to be anxious to give the oil and gas firms the opportunity to set out more ambitious plans, with further talks expected soon.
But a Treasury source said that if they failed to bring forward significant extra investment then ‘nothing is off the table’.
For the government to impose a windfall tax would be quite a U-turn. But this morning LBC broadcast an interview with Boris Johnson, recorded yesterday, in which he repeatedly refused to rule out the proposal. He said that he did not like windfall taxes, and did not think they were “the right way forward”. He explained:
The disadvantage with those sorts of taxes is that they deter investment in the very things that we [need] … they need to be investing in new technology, in new energy supply.
But when it was put to him that energy companies say a windfall tax would not deter investment, he replied: “Well, you know, then we’ll have to look it.”
In a separate report, Sam Coates from Sky News says he understands it is now possible that tax cuts could be announced before the summer recess.
Here is the agenda for the day.
Early morning: Liz Truss, the foreign secretary, speaks to Maroš Šefčovič, the European Commission vice president in charge of Brexit, about the Northern Ireland protocol.
9.30am: Mark Spencer, the leader of the Commons, makes a statement to MPs about next week’s business. After that the Queen’s speech debate resumes, covering fairness at work and communities.
12pm: Nicola Sturgeon, Scotland’s first minister, takes questions from MSPs.
12.45pm: Boris Johnson chairs a meeting of the cabinet in Stoke-on-Trent.
Afternoon: Johnson is due to do a post-cabinet visit.
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