Starmer calls emergency Cobra meeting today over crisis after saying Government ‘can’t do it on its own’ – despite ‘raking in £20million a DAY in extra tax’

Keir Starmer last night called on oil and banking executives to help Britain cope with a looming 1970s-style energy shock, warning: ‘The government can’t do this on its own.’

The Prime Minister has held crisis talks in Downing Street with leading business executives in a sign of growing concern in the government about the economic consequences of the Iran war.

Today he will bring together ministers and officials for another meeting of the government’s emergency Cobra committee to look at contingency plans for potential diesel, jet fuel and fertilizer shortages and options to help cash-strapped voters cope with the rising cost of living.

Addressing leading figures from multinational companies such as Shell, BP, Centrica and HSBC, the Prime Minister acknowledged public fears that the economic impact would ‘affect them, their families and their households… and I think top of their minds at the moment are energy bills, oil and also food prices.’

Outlining the response required, he said: ‘The government cannot do this alone. You can’t do this on your own. ‘We’ll have to work together on this.’

The appeal to business leaders represents a marked shift in tone from the approach adopted at the start of the war, which continued until last week when Sir Keir, Rachel Reeves and Ed Miliband accused energy firms of ‘profiteering’.

Despite stern warnings from the Prime Minister, it was revealed last night that the government is raising £20 million a day in additional income through taxes and fees linked to increases in oil and gas prices.

The Treasury will receive a tax windfall worth billions of pounds as energy prices soar due to ongoing conflict in the Middle East.

A sign is displayed at a Tesco supermarket in Southend advising motorists that some fuel pumps do not contain unleaded petrol

If fuel prices remain at rising levels over the next 12 months, the Government will receive an extra £8bn from VAT on oil and taxes on gas and oil companies. Times.

Extra income of around £3.5bn a year will be generated from energy profits from North Sea oil and £2.4bn from gas sales.

Hundreds of millions of dollars in taxes will also be collected from Britain’s electricity producers, who have been accused of excessive profit taxes since the outbreak of war in Ukraine.

The RAC also suggested the Government could earn an extra £2bn from VAT on petrol sales.

Ministers yesterday continued to give reassuring messages to the public about continuing to book international flights and drive as normal. But privately they are increasingly concerned about the possible economic consequences.

A Whitehall source said: ‘It is still early days and there is a balance to be struck between scaring people and preparing them for some tough decisions ahead, but the longer this goes on the more serious it looks.’

The International Monetary Fund said the war had “revived the specter of a 2021-2022 gas crisis” in Europe, with Italy and the UK “particularly exposed by their dependence on gas-fired energy”.

Lars Jensen, a former director of shipping giant Maersk who attended yesterday’s No 10 summit, warned that the crisis could be worse than the oil shocks of the 1970s.

Asked whether the crisis could trigger a repeat of the 1970s oil shock that led to a global recession, Mr Jensen said: ‘It’s easy to make comparisons. The problem is that this is not entirely true. Because at that time the amount of goods (not just oil but also fertilizer, aluminum and all kinds of other products) was much less than what we depend on today.’

The Treasury will make billions of dollars from the higher VAT on fuel and the windfall tax on oil and gas. But an energy shock could undo Sir Keir’s promise to cut the cost of living this year.

Leading banker Sir Howard Davies said last month’s rise in the government’s borrowing costs would create a £12bn hole in the public finances if it continued for the rest of the year.

Sir Howard, the former deputy governor of the Bank of England, has warned that ‘throwing’ money at a massive energy bill bailout could send international investors into a panic and send borrowing rates higher.

In a phone call with G7 finance ministers yesterday, Ms Reeves warned against ‘protectionism’ amid fears the UK situation could worsen as countries hoard their own supplies.

Kemi Badenoch has called on the Prime Minister to lift his ‘crazy’ ban on new drilling in the North Sea.

The Tory leader, who visited Aberdeen yesterday, said: ‘He doesn’t need to hold any more meetings, the oil and gas sector has said what it needs.’

In recent days, energy analysts have called on ministers to take action to protect essential supplies through measures such as lowering motorway speed limits and suspending domestic flights. But yesterday Downing Street downplayed the need for urgent action, saying the UK had sufficient supplies.

Chancellor Rachel Reeves held talks with G7 counterparts on Monday

Sir Keir said he was focusing on “de-escalating” the crisis that has led to the closure of the Strait of Hormuz, which normally carries 20 per cent of the world’s oil. “This is not our war,” he said.

‘But it is our duty to protect British citizens.’

No 10 said Britain was holding talks with 35 countries to prepare a plan to ease the crisis and reopen the Bosphorus.

But there are currently no talks with either Iran or Israel and relations with the US are at their lowest point for years and Sir Keir has little influence over the main players.