Margaret Thatcher supported windfall taxes – but it won’t work this time

Margaret Thatcher supported windfall taxes – but it won’t work this time

Advocates of a windfall tax on oil companies have invoked the spirit of Margaret Thatcher, with former Treasury Secretary Jesse Norman saying even the Iron Lady would take a cut of excess North Sea oil profits to ease living costs. Mr Norman said arguments against a windfall tax were “very weak”, as Chancellor Rishi Sunak comes under growing pressure to raise extra funds to help struggling households. But what windfall taxes have been introduced in the past, did they work and what is different this time around? Thatcher's 1981 tax on bankers In 1981 Margaret Thatcher levied a 2.5pc windfall tax on banks who were making vast profits on their loans, after interest rates hit 17pc, while paying out little or nothing in interest to savers. It raised around £400m, or £3bn in today’s money, according to the Institute for Government think tank. The government of the day, which was facing record levels of inflation and vast public debt, much like now, also levied a supplementary petroleum duty on oil companies which were seen to be profiting from higher commodity prices. The argument in favour of the windfall tax at the time was that banks’ excess profits were a direct