The Prime Minister defends the windfall tax

Blair: all will be revealed in the Budget

Blair Resists Naming Windfall Tax Firms

In his first Commons question time session since Labour's landslide election victory, Tony Blair insisted that Chancellor Gordon Brown would announce who would pay and by how much "in the normal way" in the Budget.

The Opposition leader, John Major, warned that this "populist tax on fat cats" could "hit most those who have least" by pushing up prices for the elderly and less well off.

But this charge was rejected by Mr Blair, who said: "No, that is not the case at all."

A packed Commons for PMQs

The Commons Chamber was crammed for the first new-style 30-minute Prime Minister's question time, which replaces the previous twice-weekly 15-minute sessions on Tuesdays and Thursdays.

In the teeth of Tory taunts, Mr Blair mounted a staunch defence of the planned windfall tax.

"The reason for the introduction of the windfall tax is clear," he insisted. "There is no doubt at all that vast excess profits were made (by the privatised utilities)."

"There is no doubt also that it is absolutely essential we give hope and opportunity to those hundreds of thousands of young people presently without it in our society today," continued Mr Blair.

Mr Major, asking questions rather than answering them for the first time at the despatch box since the Tories' election defeat, pointed to a warning by BT chairman Sir Iain Vallance that his company may mount a legal challenge if asked to pay the tax.

Major presses home attack on Government

Major on the offensive

Major: windfall tax will hit the poor

"In view of the apparent confusion in briefings from ministers over recent days, can you tell the House which companies and classes of companies are likely to be liable for the windfall tax?" asked the Opposition leader.

"Can you also explain why the chairman of BT apparently felt that his company would not be liable?" continued Mr Major.

To Labour cheers, the Prime Minister said he was delighted by Sir Iain's "good judgment" in voting Labour at the election.

"But the idea that somehow the chairman of BT, or indeed anyone else, was in any doubt that we were going to introduce a windfall tax, I find rather hard to say," said Mr Blair.

"The actual companies will be decided by the Chancellor in accordance with the normal precedent, which is to do any moves in relation to the Budget, in his Budget. That is the proper way to do it. Those companies and the amount of the windfall tax will be decided by him in the normal way," insisted the Prime Minister.