Boris Johnson said he cannot “magic away” all the soaring food and energy expenses as he comes under increasing pressure to alleviate the cost-of-living crisis. 

Instead the prime minister today vowed to use the “firepower” of government to “put our arms around people” as it did during the coronavirus pandemic. 

One measure he is facing calls to implement is a windfall tax on the soaring profits of oil and gas giants to fund a fresh support package or reduce consumer bills. 

But Jacob Rees-Mogg set out fresh opposition from within the Cabinet as he argued it is wrong to raid the “honey pot of business”. 

The Brexit opportunities minister claimed the one-off measure on North Sea firms would ultimately see the public pay more tax. 

Mr Johnson has not ruled out the move, instead urging firms to invest their soaring profits, and Downing Street hinted a decision would be coming “soon”. 

During a visit to Hilltop Honey’s factory, in Newtown, Powys Johnson told reporters: “I’m not going to pretend to you that we can magic away every single expense that people are going to face as a result of a global spike in energy prices. 

“But be in no doubt that this will come down, we will get people through it. We will use the firepower we have built up to put our arms around people, just as we did during the pandemic.” 

The prime minister was in Newtown for the Welsh Conservatives spring conference which is where he drew on the Covid crisis as an example of how his government had supported the public. 

He had earlier told reporters energy security was also part of the cost crisis and said at the conference: “Of course we’re going to get through this and the markets will eventually adjust and new supply will come on and prices will come down again. 

“And in the months ahead, we are going to have to do what we did before, we’re going to use our fiscal firepower that we built up to help. 

“We are going to put our arms around the British people again as we did during Covid.” 

The conference has been most notable so far for Andrew RT Davies, the leader of the Welsh Conservatives in the Senedd, calling for high speed rail HS2 funding to come to Wales, which is at odds with the Tory government in Westminster, and his call for the party to build a distinctive Welsh identity. 

HS2 funding would be worth £5 billion to Wales, but though the scheme doesn't have any tracks in Wales, it has been classed as an England and Wales scheme meaning there is no further funding for Wales from the massive spend by the UK Government.

However Johnson wouldn't be drawn on RT Davies call when questioned by the BBC for S4C's Newyddion programme.

The prime minister said: "Of course it's his job as leader in Wales to lobby for funding in Wales, I was mayor of London it's what you do."

Johnson said firms in Wales are benefitting and that his government is supporting infrastructure in Wales.

The Tories lost approaching half their council seats in Wales at this month’s council elections and control of their only council in Wales, with Labour now leading Monmouthshire council

The party also suffered losses in Powys, where it had held power with the larger independent group.

Hosting the conference in the county, which is represented by a foursome of Conservative MPs and Senedd Members, prompted Welsh Liberal Democrat leader Jane Dodds to say local voters had rejected the party.

She said: "It is somewhat ironic that they have chosen to host their conference in Powys, where the voters rejected their policy platform in spades and in Newtown specifically, where the Liberal Democrats won both the popular vote and the majority of seats."

She also claimed a lack of action by the prime minister and chancellor Rishi Sunak on cost-of-living were cited as "one of the main reasons voters were switching from the Conservatives to the Liberal Democrats".

On the cost of living crisis Labour leader Sir Keir Starmer argues a government U-turn on opposition to a windfall tax is “inevitable” as it would “raise billions of pounds, cutting energy bills across the country”. 

But Rees-Mogg told reporters: “Retrospective taxation is difficult because you are changing the understanding of what people do when they invest. 

“It’s difficult because tax on corporations ultimately falls on individuals anyway, it either falls on individuals because the companies to maintain their net margin around the world increase their pricing in the UK. 

“Or it falls on individuals because the profit doesn’t fall through to the dividends that fund their pensions. 

“So I think the idea of a windfall tax as a panacea to the inflation problem is wrong.” 

Pressed if he would say never to such a tax, Rees-Mogg said: “I’m not commenting on what the Chancellor will do, that’s a matter for him and his budget. 

“I’m merely saying there is this honey pot of business you can just raid whenever you feel like is not true.” 

Rees-Mogg, who also holds the brief of Government efficiency minister, added: “All taxation ultimately falls on individuals so when you’re calling for a windfall tax you’re saying you want to pay more tax.” 

The idea of a windfall tax has gained popularity because energy firms are seeing soaring profits due to of rising consumer prices, as fuelled by the pandemic and the war in Ukraine. 

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Chancellor Rishi Sunak has not ruled out imposing the measure, and has said “no option is off the table” if companies do not increase their investment “soon”. 

Downing Street said on Friday that ministers “haven’t put a timeline” on when firms must change their profits into spending, but reiterated a decision would come “soon”. 

Labour has argued a windfall tax could fund a VAT cut on energy bills and an increase in the warm home discount for those on a low income. 

Offshore Energies UK, the energy industry’s trade body, has said the tax would put investment and jobs at risk. 

Additional reporting: Twm Owen

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