𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Ed Miliband and Sir Keir Starmer have been blasted by critics after suggesting a windfall tax on the “excess” profits of energy companies, despite those profits being earned overseas. It comes after the pair announced their support for a windfall tax on oil and gas firms, which Mr Miliband said were making “excess profits from war”.

British Petroleum’s margins have more than doubled after the conflict in the Middle East sent oil prices rising. But critics have slammed the Energy Secretary as a “student union activist”, adding that the existing levy was “hitting small independent producers, losing thousands of workers their jobs and stopping us making the most of our North Sea oil and gas”. Claire Coutinho, the Shadow Energy Secretary, panned her opposite number, saying it was “classic Ed Miliband”.

She added that the frontbench minister “doesn’t understand these profits do not fall under his windfall tax, because he has no interest in business or how it operates”.

Ms Coutinho added: “What his tax is doing is hitting small independent producers, losing thousands of workers their jobs and stopping us making the most of our North Sea oil and gas, so we rely more on foreign imports. As ever, it’s economically illiterate.”

She said: “We need to get Britain drilling again and cut people’s bills with our Cheap Power Plan.”

Lord Frost, of the Institute of Economic Affairs, said: “Ed Miliband’s comments reveal a fundamental confusion about how market economies work.

“When energy prices rise because of a geopolitical crisis, companies that produce energy make higher returns – that is not a scandal, it is a signal.

“It is precisely that signal which attracts investment, keeps supply flowing, and ultimately bears down on prices. A minister who calls profit ‘morally wrong’ does not understand the basic logic of the economy.

“The windfall tax on North Sea producers has already done serious damage to domestic energy investment at exactly the moment we need more of it.

“Rather than grandstanding about BP’s balance sheet, Mr Miliband should be asking why Britain remains so exposed to global price shocks – and whether his own energy policy bears some responsibility for that.”

Labour has long backed calls for energy companies to face greater taxation if they earn what the party describes as “excess” profits.

But economists have pointed out that the profits in the Government’s sights are earned overseas, meaning they would not fall under the existing windfall tax on North Sea producers.

The Energy Secretary has repeatedly defended Labour’s windfall tax on North Sea oil and gas producers, arguing it is necessary to fund the transition to renewable energy.

The Conservatives have pledged to scrap the windfall tax.