industry

A windfall tax on North Sea oil and gas: what have ministers said so far?


Officially, the government’s position on Labour’s idea of a windfall tax on the profits of North Sea energy companies has not changed – ministers believe it is not the right idea overall, but all options remain possible. However, it is fair to say that in recent weeks the messaging on the idea has been somewhat inconsistent.

27 April – morning

Dominic Raab, the deputy prime minister, told Sky News the idea was frankly ill thought-through, arguing: “If you look at Labour’s policy of a windfall tax, that would damage investment in energy supplies we need and hike bills. It’s disastrous. It’s not serious.”

27 April – lunchtime

At prime minister’s questions, Boris Johnson labelled the idea a “new tax on business”. He told MPs: “Labour’s thing raises only £6.6bn, and it clobbers the very businesses that we need to invest in energy to bring the prices down for people across this country.”

27 April – afternoon

In a Q&A session with the Mumsnet website, Rishi Sunak, the chancellor, said that he feared the plan would put off investment in new oil and gas extraction. However, he added: “If we don’t see that type of investment coming forward and companies are not going to make those investments in our country and energy security, then of course that’s something I would look at and nothing is ever off the table in these things.”

1 May

Kwasi Kwarteng, the business secretary, seemingly disagreed with Sunak’s thoughts. Asked about them, he told Sky News: “I’ve never been a supporter of windfall taxes. I have been very clear on that publicly, I think it discourages investment and the reason why we want to have investment is because it creates jobs, it creates wealth and it also gives us energy security.”

12 May – morning

In an interview with LBC, Johnson said he did not “like” windfall taxes, saying: “I didn’t think they’re the right thing. I don’t think they’re the right way forward. I want those companies to make big, big investments.”

12 May – afternoon

Sunak told the BBC that while he was “not naturally attracted to windfall taxes in general”, he was nonetheless “pragmatic” about the idea: “These companies are making a significant amount of profit at the moment because of these very elevated prices. What I want to see is significant investment back in the UK economy to support jobs, to support energy security, and I want to see that soon. If that doesn’t happen, then no options are off the table.”



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