‘Nothing is Ever Off the Table’: Rishi Sunak Warns UK Energy Firms May Face Windfall Tax

Earlier this week, Rishi Sunak came under pressure from British Policing Minister Kit Malthouse to reduce the tax burden, something that the minister claimed would be the best way to help tackle the cost-of-living crisis in the UK.

UK Chancellor Rishi Sunak has warned the country’s oil and gas companies that they could be hit by a windfall tax unless they ramp up investment in new energy projects.

The chancellor has repeatedly argued against such a levy, which is supported by Labour, claiming that it would deter Britain’s investment in the North Sea and green-energy projects.

Speaking to the online parents’ forum Mumsnet on Wednesday, Sunak said that he had not announced about introducing such a levy in last month’s Spring Statement, in spite of increasing profits in the oil and gas, because he wanted companies to invest.

“What I would say is that 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 [levying a windfall tax] something I would look at and nothing is ever off the table in these things”, the chancellor stressed.

He spoke shortly after Justice Secretary Dominic Raab dismissed the idea of imposing a windfall tax as “disastrous” and “damaging”, while Prime Minister Boris Johnson rejected the proposal as a “tax on business”.

The remarks came as BoJo told his ministers to come up with ideas to reduce the cost of living that would not incur extra costs for the Treasury during a Cabinet meeting on Tuesday. An array of senior government figures adhered to the official government line that a windfall tax on the oil and gas sector would be a bad idea.

Labour leader Keir Starmer, for his part, argued that Johnson was the “Comical Ali of the cost-of-living crisis”, allegedly because the PM had failed to come up with significant measures to help households.

“North Sea oil producers are making so much unexpected profit that they call themselves a ‘cash machine’. That cash could be used to keep energy bills down”, Starmer told lawmakers.

This was preceded by an opinion poll for the Daily Mirror revealing that more than half of Britons would not be able to afford to pay their bills within a matter of months, and that over five million of them are already forced to pick between heating and eating.

In late February, Foreign Secretary Liz Truss admitted that the sanctions London had slapped on Russia in retaliation for its special military operation in Ukraine would worsen the UK cost of living crisis, warning that Britain must be prepared to take an “economic hit”.