Home U.K Pensions row escalates over windfall tax as BBC dividends claim debunked

Pensions row escalates over windfall tax as BBC dividends claim debunked


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UK pensions have been brought into the divisive windfall tax debate after a comment made during BBC Radio 4 presenter, Justin Webb’s, discussion with ex-Financial Secretary to the Treasury, Jesse Norman, on his Monday morning show. Senior Cabinet members have not dismissed a potential windfall tax being levied on energy companies’ profits.

A windfall tax would be a one-off payment, and the tax would be channelled into offsetting rising energy bills as the UK’s cost of living crisis deepens.

But a comment made on BBC Radio 4’s Today programme attracted criticism on Twitter as the debate over this windfall tax, and its impacts, rumbles on.

Speaking to Mr Norman, Mr Webb pointed to remarks made by Education Secretary, Nadhim Zahawi, who said that a windfall tax being applied to energy companies could put pensioners’ entitlements at risk.

Mr Zahawi said over the weekend that the one-off tax on the giants of the energy business could mean dividends are cut, or scrapped altogether.


Chancellor Rishi Sunak is considering the one-off levy for energy companies (Image: Getty)


Nadhim Zahawi said the one-off tax on the giants of the energy business could mean dividends are cut (Image: Getty)

He said: “If you apply a windfall tax, [companies] will probably have to reduce or take away their dividend.

“Who receives the dividend? Pensioners through their pension funds.

“Investment has to be real, which is what I think Rishi Sunak will demand of all these companies and to see a roadmap towards that investment.”

Mr Zahawi continued: “We want to see their investment but also remember it’s pensioners who basically get the dividend from these companies, and if they’re going to cut their dividend because they have had a windfall tax, then that’ll make a difference to pensioners.”

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cost living

The conversation around windfall taxes comes as the UK feels the pinch of the cost of living crisis (Image: Getty)

Mr Zahawi then promised to “look at all the options,” adding: “I with the Chancellor, Prime Minister and Cabinet will look at every option.”

Mr Webb put these comments to Mr Norman, asking whether the “public would suffer” from this tax.

Mr Norman responded that dividends linked to pension pots being cut are a “real concern” but dismissed it being a deeper concern “in this case”.

Freelance financial journalist Charlotte Moore took to Twitter to write: “Justin Webb on @BBCRadio4 has just said a windfall tax will have a negative impact on pensions and pensioners because it will reduce dividends.

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“This is your regular reminder that, at the moment, most pensioners are not heavily invested in equities.”

Chancellor Rishi Sunak is considering the one-off levy for energy companies that was initially proposed by the Labour Party, but the Government has not ruled out implementing the measure.

Labour leader Sir Keir Starmer said a windfall tax would be a solution that is ”staring the prime minister in the face”.

Chief secretary to the Treasury, Simon Clarke, said that “all options are on the table” as “extraordinary pressures on family finances” bear down on UK homes.

oil refinery

Oil companies have made unexpected profits as oil and gas prices skyrocket (Image: Getty)

He told Sky News: “On the concept of a windfall tax itself, we are very very clear that there is a real need at a time when the industry is making very significant profits to see those profits reinvested in new offshore installations – getting more out of the North Sea, which is obviously vital in terms of energy supply but also good for jobs and the wider economy.

“If we do not see that investment materialise then we are very clear that all options are on the table.”

The measure has split senior Tory ranks, with Prime Minister Boris Johnson cautious in his response to the proposed windfall tax, commenting: “I don’t like new taxes.”

He said: “No option is off the table, let’s be absolutely clear about that.

“I’m not attracted, intrinsically, to new taxes.”

He then said the Government would “look after people through the aftershocks of Covid, through the current pressures on energy prices” and “put our arms round people”.

The BBC has been contacted for comments.

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