Rishi Sunak warms up to tax plan energy windfall: Gas and oil giants could be told to pay billions

Rishi Sunak (pictured) has reportedly ordered officials to look into a possible windfall for oil and gas giants

Rishi Sunak (pictured) has reportedly ordered officials to look into a possible windfall for oil and gas giants

Rishi Sunak warms up for energy windfall tax plan: Gas and oil giants could be told to pay billions to help cost-of-living crisis following Chancellor’s concerns over lack of action from industrial giants

  • Rishi Sunak orders officials to investigate possible windfalls on oil and gas companies
  • Comes after MPs repeatedly ruled out measures saying it could discourage investment
  • Chancellor would be concerned because industry giants haven’t increased spending

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Rishi Sunak has ordered officials to investigate plans for a possible windfall on oil and gas giants.

Ministers have repeatedly ruled out the idea, warning that it could harm investment in energy infrastructure.

But the chancellor would be alarmed that industry giants have done little or nothing to increase spending despite reaping huge profits.

Ministers were also stunned by comments from BP chief Bernard Looney, who said his company’s investment plans would not be affected by a windfall.

Mr Looney also described his business as an ‘ATM’.

Multiple sources said the idea of ​​a tax bill was “back on the table” to help families with the cost of living crisis without raising public loans even higher.

An insider said a one-time tax is “no-brainer if the top executives say they have no problem with it.”

Rishi Sunak (pictured) has reportedly ordered officials to look into a possible windfall for oil and gas giants

Rishi Sunak (pictured) has reportedly ordered officials to look into a possible windfall for oil and gas giants

Rishi Sunak (pictured) has reportedly ordered officials to look into a possible windfall for oil and gas giants

BP's stock prices have skyrocketed this year as millions of people face skyrocketing energy costs amid the cost of living crisis

BP's stock prices have skyrocketed this year as millions of people face skyrocketing energy costs amid the cost of living crisis

BP’s stock prices have skyrocketed this year as millions of people face skyrocketing energy costs amid the cost of living crisis

Both Mr Sunak and Boris Johnson would like to give the oil and gas companies the opportunity to develop more ambitious plans, and further discussions are expected soon.  (Pictured: Boris Johnson charges an electric van as BP CEO Bernard Looney and Severn CEO Liv Garfield look on, in July 2021)

Both Mr Sunak and Boris Johnson would like to give the oil and gas companies the opportunity to develop more ambitious plans, and further discussions are expected soon.  (Pictured: Boris Johnson charges an electric van as BP CEO Bernard Looney and Severn CEO Liv Garfield look on, in July 2021)

Both Mr Sunak and Boris Johnson would like to give the oil and gas companies the opportunity to develop more ambitious plans, and further discussions are expected soon. (Pictured: Boris Johnson charges an electric van as BP CEO Bernard Looney and Severn CEO Liv Garfield look on, in July 2021)

Both Mr Sunak and Boris Johnson would like to give the oil and gas companies the opportunity to develop more ambitious plans, and further discussions are expected soon.

But a Treasury Department source said if they fail to bring forward significant additional investment, “nothing is off the table.”

The Treasury declined to comment on how much a windfall tax could yield.

But Labor suggested its own plans for a one-off attack on the oil and gas sector could raise £2bn. The proceeds could be used to ease the pain of an expected rise in energy bills in October.

Analysts fear a jump of as much as £600 when the price cap is reassessed by regulators in Ofgem in the autumn.

Jonathan Brearley, the watchdog’s director, said the war in Ukraine had left the gas market in a “fever state” and rising bills were now “literally a matter of life and death.”

His warning came as:

  • The Prime Minister was preparing to hold a ‘cost of living’ cabinet in Stoke today;
  • He told Tory MPs at a No. 10 garden party that he wanted to cut taxes;
  • Former Cabinet Secretary David Davis this summer called for an ’emergency budget’ to help troubled families;
  • Mr Johnson warned that households had to be ‘realistic’ about what the government could do to help them;
  • He revealed that communities that want to accept onshore wind farms can have their energy bills cut.

Both the Chancellor and Prime Minister were wary of the idea of ​​a windfall, fearing it would curb investment as the government looks to scale up domestic energy supplies. There is also a fear that a levy could have consequences for the dividends paid to pension funds.

Last week, BP announced a record profit of £4.9 billion for the first three months of this year, while Shell revealed a record profit of £7.3 billion. The former pledged to invest £18bn in the UK by the end of 2030 and the latter £25bn.

But a Treasury analysis of BP’s proposals would have concluded that they have barely changed from previous plans. Total investments in the North Sea by energy companies have fallen by 90 percent since 2014.

A government source said the prime minister remained concerned about the potential ‘disadvantages’ of a one-time tax, but acknowledged that if energy companies fail to increase their investment, the idea would become ‘more difficult to resist’.

Mr Sunak told the Mail this week that he hadn’t ruled out the idea: ‘As far as a windfall tax, we’re keeping all options on the table and what I want is for the investment to come forward. I want these companies to invest in the UK.”

Tesco chairman John Allan has said the arguments for a windfall tax were overwhelming in light of the real hardship he had seen in stores.

At an event in Glasgow, Mr Brearley said a cancer patient had told him she felt ‘more comfortable’ in hospital because she didn’t have to worry about heating costs. ‘I regularly talk to customers and I know how steeply rising energy prices are for many households and companies,’ he says. ‘For some, not being able to pay a rising energy bill is literally a matter of life and death.’

It was reported last night that Mr Sunak is preparing to announce a major support package in the summer for households struggling with rising energy bills.

Source: New feed