𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Chancellor John Healey was accused of considering “literally everything” but slashing benefits as he ponders a windfall tax on banks and oil companies. Mr Healey is mulling slapping firms with the levy to plug a £4.7bn hole in the public finances.

The Labour stalwart, who has come under fire for refusing to fund a pledge to hit 3% of GDP on defence, wants to avoid direct tax increases on individuals. But Reform’s economic spokesman, Robert Jenrick, said: “Labour will do literally everything under the sun other than fix the ballooning benefits bill. John Healey should take up Reform’s plan to save £51 billion by stopping benefits for those choosing not to work and ending it for migrants.

“Unless Burnham cuts the waste on net zero subsidies, foreign aid for rich countries and handouts for illegal migrants, working people will be hammered with tax rises in the Budget.”

Treasury officials are discussing both policies as they try to plug a £4.7bn hole in the public finances while seeking to avoid direct tax increases on individuals.

A source said: “The Treasury position has never wavered – that there is less money to play with than we would like and we have to be really careful about spending taxpayers’ money.

“There is an inter-Whitehall war going on between those who have to make the sums add up and the rhetoric.”

Mr Healey, in his first Budget, could increase taxes on banks as they have benefited from interest rate rises. Officials see it as “low-hanging fruit”.

Oil companies have also generated vast profits as the fallout from US-Iran war intensifies.

One option under consideration would be for the Treasury to launch a time-limited “windfall” tax on banking profits, modelled on a similar policy applied to oil and gas giants since the start of the war in Ukraine. Mr Healey could also extend the windfall tax on the oil and gas sector beyond March 2030, and increase the levy.

A Treasury spokesman said: “The Chancellor is fully focused on his priorities, which will boost business, help with the cost of living and support people in every postcode.

“As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on proposals made.”