12NEWS
Bonfire of the subscriptions as
cash-strapped Britons cut back
Should the government impose a
windfall tax on oil and gas companies?
Have your say at sundaytimes.co.uk/polllot of what I now call luxury
items like books have gone to
keep the costs down.”
Jeremy King, chief
executive of Attest, said TV
streaming services in
particular faced “a real
challenge to keep customers
on board at a time when
many of these platforms are
raising prices”.
In April Netflix revealed it
had lost 200,000 subscribers
in the first three months of
the year and warned another
two million were expected to
cancel in the coming quarter.
Many subscription services
are trying to lure customers
with vouchers and even free
goods. One customer said
they had received free roses
and a vase after cancelling
their Freddie’s Flowers
subscription, which costs £
for each weekly box.money”, while others said
they were not using the
service enough or were
unhappy with the rise in cost.
One 26-year-old school
receptionist, from Leeds, said
she had saved more than
£1,000 a year, but the impact
on her life had been difficult.
She has cut her two book
memberships, which cost
£300 a year, her gym
membership, also £300 a
year, switched to a pay-as-
you-go phone when her
phone contract ended
recently, saving £480 a year,
and got rid of Amazon Prime
at £79 a year.
She said: “It was hard
because, as an autistic
person, the gym was really
the only thing that got me out
of the house, apart from
work, so my social skills kind
of went downhill after that. Agovernment, is 2 per cent.
Television streaming
services such as Netflix,
Amazon Prime, Sky and
Disney+ accounted for more
than half of cancellations.
This was followed by music
streaming services, such as
Spotify and Apple Music, food
and drink boxes and gym and
fitness memberships.
More than half of those
who cancelled a service said
they wanted “to saveNearly four in 10 people have
cancelled a subscription over
the past six months in an
effort to save money, as
inflation climbs to a 40-year
high, research reveals today.
A survey of 2,000 people
by the consumer research
platform Attest found that
37.5 per cent of people have
cancelled a subscription in
the past six months,
compared with 14 per cent in
the six months prior to that,
or 7 per cent in the previous
six months.
The consumer price index
measure of inflation reached
9 per cent in the year to April,
the Office for National
Statistics said last week. The
Bank of England’s target for
inflation, set by theLouise Eccles and
Ellie McDonaldLuxuries
like books
have gone12POLITICS
B
oris Johnson had just come off
the phone with Volodymyr Zel-
ensky, the Ukrainian leader,
when he was informed that he
would not be facing any further
fines from the Metropolitan
Police over the No 10 parties
scandal. While some aides
were jubilant that his job was safe, the
man himself seemed nonplussed.
“Mentally, he had already moved on,”
said one aide. “There was not a fist in the
air or a high five from him. He was sur-
prisingly subdued.” Johnson said: “Now
we’ve got to get on with everything else.”
Downing Street sources say that, in
recent weeks, the prime minister has
been spending 60 per cent of his time on
the cost-of-living crisis, the “everything
else” clogging his inbox.
While Johnson will endure an awk-
ward time when the Sue Gray report —
into the culture of lockdown-breaking
over which he presided — is released this
week, his most awkward meetings are
likely to be with Rishi Sunak, the chan-
cellor. The men have been locked in
conditions one minister likened to “a
papal conclave” over what to do to curb
the impact of rising energy prices.
Today it can be revealed that Sunak is
attracted to a windfall tax on the energy
companies, whose profits have soared
thanks to the rising price of oil and gas,
but one that offers them different rates of
tax based on what they are prepared to
invest. Firms such as BP and Shell would
face a lower tax rate if they promise to
increase the billions they are prepared to
pour into building new facilities.
“There could be a more pro-invest-
ment way of doing a windfall tax,” said a
source familiar with the chancellor’s
thinking. “He’s certainly of the view that
there is a not-so-sledgehammer way you
could do it. You could actually bring in
quite a lot of money. You can peg it to
commitments and say the rate will come
down if they make investments.” In this
scenario, far from depressing investment
which might boost economic growth, a
windfall tax could be used to stimulate it.
Treasury insiders say that Sunak feels
such a measure may be necessary
because the threat of a windfall tax has
not prompted the energy companies to
turn on the spending taps, despite a huge
increase in profits. Shell has already
pledged £25 billion and BP £18 billion but
a source said: “A lot of that they
announced pre-profits and a lot of it is not
UK-focused. These guys are surprising
themselves at what they’re raking in and
are not being proactive.”
The Tories’ private polling suggests
that the windfall tax is backed by more
than 80 per cent of the public. However,
Sunak’s plan has run into a wall in the
form of Johnson’s advisers: David Can-
zini, Guto Harri, Steve Barclay and
Andrew Griffith, who all — in principle at
least — oppose the measure on the
grounds that it is “unconservative”.
Johnson is prepared to sanction a
windfall tax but only if the Treasury
agrees to spend some of the money on
massive new investment in nuclear
power stations and offshore wind farms,
which Sunak has so far stonewalled, and
makes a more “compelling” and “con-
servative case” for doing so.
“The starting point for all of us is that
Tories don’t do windfall taxes,” a source
close to the prime minister said. “If we
have to, it has to be because it raises a lot
of money, it has to be worth it because it
doesn’t damage investment; and it has to
be because we are going to do something
better with it than the private sector will
do for themselves. None of which has
been articulated compellingly enough by
anyone to this point.”
In a further waspish broadside, a sen-
ior No 10 official complained that theTreasury had consistently blocked the
prime minister’s wish to build new infra-
structure to rebalance Britain’s energy
supply away from imported oil and gas.
“Boris wants to spend money on things
that bring noticeable, tangible benefits in
the long term,” he said. “Spending
money on nuclear power stations and off-
shore wind: fantastic. The Treasury
seemed to make that as excruciatingly
difficult as they possibly could.”
Spurred on by Canzini, Johnson’s posi-
tion is that spending the proceeds of a
windfall tax — just “shovelling” money
into people’s pockets to appease “bleed-
ing hearts” — is only a short-term fix and
that the money will be “here today and
gone tomorrow”. Colleagues say Harri,
the director of communications, has
crystallised the internal debate into a
choice between providing “pain relief ”
for the immediate cost of living and
“surgery” that will boost the economy
for years to come.
Senior Downing Street figures feel
that the Treasury has failed to take
the short-term benefits of such
infrastructure spending into
account when dismissing John-
son’s demands. “When you
commit to rail improvements,
nuclear power stations, it’s not
just benefits down the line,
jobs are created now,” one
said. “It’s not just about jam
tomorrow, it’s quite a bit of jam
today and a better tomorrow.”
As far as the rest of the package goes,
Sunak is examining the best way to target
those who are suffering most. “There are
things that were looked at before that are
being looked at again, whether it’s the
warm homes discount, a council tax
rebate, or more winter fuel benefits
because that covers pensioners,” a senior
government official said. “You could
increase the generosity; you could bring
forward the payments.”
The chancellor also said last week that
he would unveil tax cuts for businesses in
the autumn. This is likely to mean “capi-
tal allowances” to incentivise invest-
ment, rather than any change to his plan
to increase corporation tax to 25p in the
pound next year.
Treasury sources say Sunak’s “priority
is targeting the most vulnerable”. But in
both No 10 and 11 Downing Street there is
also concern about those on middle
incomes — households on £30,000-
£50,000 a year — “who are getting
screwed” but who have not benefited as
much as those at the bottom.
While the chancellor is not keen on a
cut in VAT, Johnson’s team believes that
slashing the rate on fuel and food would
also be a more effective and equitable
measure than some of the ideas being
examined by the Treasury.
With Sunak badly weakened by revela-
tions that his wife was non-domiciled for
tax purposes and under fire for a spring
statement which poured £22 billion into
the economy, partly through a 5p cut in
fuel duty, but garnered little political
credit, Johnson is in position to dictate.
“We put £22 billion in and got f*** all for
it,” one senior figure noted. Another
added: “When it comes to the crunch,
Boris will remember, I am sure, that he is
first lord of the Treasury.”
Relations between the two men are
cordial. “Boris and Rishi are getting on
fine,” said one source. “They really are
cup and saucer. They have complemen-
tary skills and recognise that in each
other.”
However, there remains mistrust
between the teams. When two reports
emerged last week that senior Conserva-
tives, some of them close to Sunak, were
pondering whether losing the next elec-
tion might help the party to renew itself,
suspicion fell on whether this was hisStreet official said. “That’s where a wind-
fall tax might be a necessary evil to
address that challenge.”
In a meeting last week on the Northern
Ireland protocol, tensions over Brexit
played second fiddle to cabinet splits
over tax. Sunak was talking about the
need to encourage business investment
when Brandon Lewis, the Northern
Ireland secretary, exclaimed: “Then cut
corporation tax.” He was joined by Kwasi
Kwarteng, the business secretary, who i
blurted: “Yes!” In a BBC interview last
week Liz Truss, the foreign secretary,
denounced the decision to raise national
insurance contributions to pay for the
NHS and social care.
Whatever the final package looks like,
the new political axis in Downing Street
will begin to publicly make a conservative
case that, despite the largesse of the pan-
demic, a hand-up not a handout will be
the norm. This view in No 10 was rein-
forced last week when a cabinet minister
sent Downing Street aides a WhatsApp
message with an adaptation of an old
adage: “Teach a man to fish and he can
look after himself, give a man a fish and
he votes Labour.”
A “narrative” document circulated
to ministers by Canzini stresses that
“work is the best route out of poverty”.
Johnson began to explore this argu-
ment when he addressed the Welsh
Conservative conference last week,
telling delegates: “I was eight years
old when unemployment was last
this low.”
Johnson also used the occasion
to joke about lockdown: “Why
did God spend the last two years
in Wales? Because he was work-
ing from home.”
But challenged to provide an extra
holiday for St David’s Day, Johnson drew
the line. “The humour was about being at
home and not working, but the challenge
is not how you give people extra holidays
or pay them to be economically idle, the
challenge is to do the opposite,” an aide
said. “Much of him doesn’t like the idea of
a windfall tax but if it’s got to be done,
there is no one better to sell it than him.”
Editorial, page 22Tim Shipman
Chief Political CommentatorThe windfall tax storm blows Sunak
and the PM in different directions
view as well. Close allies of both Sunak
and Johnson say this is untrue and that
the chancellor has realised, after his pop-
ularity plummeted, that his own political
future is tied to that of Johnson. “They are
inexorably linked,” a senior political
adviser to the prime minister said. “And
they both know that.”
However, there remain fears that
Sunak’s natural caution will mean the
package is politically underwhelming.
One friend of Sunak said: “He needs to
blow the doors off. At the moment, only
the door handle is being troubled.”
Another said that even a windfall tax
would only generate £150 per household.
“You are pissing in the wind to be hon-
est,” they added. But there is also con-
cern in Sunak’s inner circle that pumping
money into the economy could fuel infla-
tion, which is already limiting his room
for manoeuvre. “It’s a very fine judg-
ment,” one said. “You could pour some
real petrol on the inflation fire.”
Some senior Tories had expected a
package to be announced as early as
Wednesday but sources in both the Trea-
sury and No 10 say it will not be before
parliament goes into recess on Thursday.
The week after that is the Platinum
Jubilee celebration. While the details of
measures to make childcare cheaper
could be announced that week, the
week beginning June 6 is likely to be the
first opportunity to unveil the main
support package.
Part of the reason for the delay is that
the scale of the problem will not be clear
until the end of the month, when Trea-
sury officials will be able to calculate
what the energy price cap is likely to be in
October. Some predict it will rise from
£2,200 to £3,000, slapping another £
on bills. But an insider said: “It could be
£200 one way or the other and the scale
of the problem will have a big sway on the
level of generosity.”
Johnson’s team is determined to resist
the growing demands from Tory MPs for
an immediate handout before the sum-
mer. It is likely that Sunak will announce
changes that will only take effect later in
the year. “We don’t need pain relief for
this month but for October, when the
bills will go higher again,” a Downing£
Amount of money per household that
a windfall tax would be likely to raise80%
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