Rachel Reeves urged to raise taxes on companies profiting from Iran war – UK Times

Rachel Reeves has been called on to raise taxes on business that are making profits linked to the Iran war in order to fund emergency cost of living support for UK households.

Some 40 leading UK charities organisations and unions wrote an open letter to Sir Keir Starmer and the Chancellor, urging the government to tackle profiteering, including Greenpeace UK, Tax Justice UK, National Education Union and Global Witness.

They instead proposed the government use the companies’ tax revenue to provide direct cost of living support, and investment in the long-term resilience of the UK economy to make it less susceptible to fuel price shocks.

The US-Israeli war in Iran has seen the cost of oil skyrocket, with Brent Crude prices soaring past $100 per barrel since the conflict began as the Strait of Hormuz remains under Tehran’s control.

As oil trickles out of the strait, it’s had a knock-on impact on the global economy with import-dependent countries in Asia declaring emergencies as their reserves run low.

Meanwhile, the Organisation for Economic Cooperation and Development (OECD) warned that the UK would be worst hit of any G20 nation with the 2026 growth forecast downgraded to 0.7 per cent from a previous estimate of 1.2 per cent.

As the UK is set reap the financial consequences of war in the Middle East, the open letter pointed out that “North Sea energy firms are set to make bumper profits.”

The End Fuel Poverty Coalition reported that for every month that energy prices remain at levels seen on 18 March 2026, profits could result in over £200m in tax revenue through the Energy Profits Levy.

“It is not right that extraordinary profits, generated off the backs of ordinary people during periods of crisis, are siphoned off into private hands and corporate bank accounts”, the letter continued. “All whilst households and businesses are in urgent need of substantial support to cope with the affordability crisis.”

The signatories said the war should be a “turning point for the UK” as “energy bills, fuel costs, and essentials are set to increase in costs for households and businesses already struggling with affordability after years of a cost of living crisis”.

It comes as the government’s own cost of living champion, Richard Walker, urged Sir Keir to explore a profits cap on energy and fuel firms.

Former Labour MP candidate Faiza Shaheen, the executive director of Tax Justice UK who coordinated the letter, said: “Too often UK governments have failed to protect households and small businesses from the profiteering corporates and super-rich individuals who circle around crises like vultures.

“Spain has already frozen rents, yet our government fails to show urgency.

“The Chancellor needs to get a grip on the situation to help people already struggling, and show that this will not be yet another crisis where the rich get richer, while everyone else foots the bill.”

Simon Francis, of End Fuel Poverty Coalition, said: “Gas prices have more than doubled since late February, and households are already struggling with energy bills that have been stuck at elevated levels for five years.

“The latest global disruption is a stark reminder of the cost of our dependence on imported fossil fuels. Every time conflict or instability strikes overseas, ordinary households pay the price through their energy bills.

“The Government must act urgently to protect households from the impact of rising prices and ensure that the billions in excess profits energy companies are making during this crisis are redirected to support the people who need it most.

“Wiping out household energy debt, strengthening the Warm Home Discount and accelerating investment in home insulation would all help cushion the blow.”