Labour has urged the government to impose a windfall tax on North Sea oil and gas producers to reduce the average household bill by £200.

The party said its £6.6 billion plan would also include removing VAT on domestic energy bills for a year and increasing the Warm Homes Discount for the most vulnerable customers.

Shadow Chancellor Rachel Reeves said: “It is right to ask those who have benefitted from higher gas and oil prices to pay more into the system and that’s why I am putting forward a one-off increase in the taxes paid by North Sea oil and gas.

“They are likely to make record profits this year because of that spike in prices – let’s tax them a bit more and use that money to reduce bills for ordinary people who are struggling so much at the moment.”

In an interview on BBC Radio 5 Live, Ecotricity Founder Dale Vince said taking VAT off from energy bills won’t be enough for consumers.

He said: “It’s time for the government to seriously consider a one-off windfall tax on the North Sea oil and gas industry, or just remove the £9 billion of stealth taxes off our energy bills – this is around £300 for each and every one of us.”

Last week, Boris Johnson rejected calls to remove VAT from energy bills. The Prime Minister is expected to hold energy crisis talks this week.

ELN has contacted BEIS for a response.