Windfall Tax: Government red tape is artificially increasing prices

Responding to the Chancellor's announcement that he would be introducing a levy on energy companies to fund cost of living payments , Alison Williams, Global Head of Data at DunnHumby and member of the UK Trade and Business Commission said,

“While it is right that the Chancellor acts to help people struggling to pay their energy bills, this is a short term intervention for a crisis many expect to extend past 2023 and so Ministers must tackle the causes of rising costs, rather than solely treating the symptoms.

“Earlier this year we heard how new barriers to trade are increasing prices across the UK including hiking the cost of school shoes by five to ten pounds, so while there is much that the government cannot control in this cost of living crisis, they can reduce red tape for British importers and exporters that is artificially increasing prices further.”

In March, the cross-party, cross-business Commission heard that post-Brexit import checks are resulting in less choice and higher prices for UK consumers. 

Business leaders told commissioners of rising cost prices on items such as children’s school shoes and bottles of wine. Tanya Marriott, Owner of Solelution, explained how shoes at cost price on average are going up between £5-£10 for the next Autumn/Winter season, which will mean a rough increase of £10-£20 for consumers at retail. The managing director of Daniel Lambert wines explained that on average, cost prices are already up by 20p-40p on wine, working out at roughly £1-£1.10 extra per bottle for the consumer. 

Commissioners were also told that part of the problem is profiteering from a “cartel” of freight companies charging unjustified additional duties on freight. Describing how many are “hellbent” on these extra charges, witnesses called on HMRC to investigate why these  unnecessary costs were being added. They further explained that HMRC officials have expressed their anger at the government over post-Brexit policies.