Unions urge bank tax to fund energy bill cuts amid cost-of-living pressures

Unions are calling for higher taxes on banks to fund cuts to energy bills for some households, as the government faces difficult spending choices. Lower energy bills could ease cost-of-living pressures, increasing households’ real disposable income and allowing them to spend more elsewhere. But if extra tax revenue cannot be raised, the government may have to reconsider other spending plans to fund the support — potentially meaning less money available for priorities such as defence. The proposal therefore highlights the competing demands on limited government finances.

Tax banks to give some households energy bill cut, unions tell PM - BBC News

1. Explain the opportunity cost to the government of lowering energy bills, using information from the article.

2. Discuss how an increase in the bank surcharge could increase government revenue.

3. Discuss the likely impact of reducing energy bills on economic growth.