British Gas owner says windfall tax ‘won’t strike the right balance’

THE chairman of British Gas owner Centrica has warned of “long-term problems” if the Chancellor chooses to hit power generators with a windfall tax.

Scott Wheway said he welcomed government efforts to help consumers but ministers needed to “strike the right balance”.

Rishi Sunak, the Chancellor, is exploring plans for a raid on electricity generators’ profits after hiking taxes on oil and gas producers from 40pc to 65pc last month. Ministers are raising cash to ease the pressure on households from soaring energy bills, which climbed 54pc in April and could jump by a further 42pc in October to £2,800.

However, industry bosses argue that sudden tax changes will harm investor confidence at a time when companies are battling a shift to greener energy and attempting to bolster domestic supplies amid Russia’s war on Ukraine.

Centrica’s business spans North Sea oil and gas production through Spirit Energy, electricity generation through its 20pc stake in the UK’S nuclear fleet, and household energy supply through

British Gas. Mr Wheway was asked by shareholders at the FTSE 250 company’s annual general meeting in Leicester yesterday whether he would launch a legal challenge over the Governnment’s raid on oil and gas producers.

He said he did not see any need to do so, but warned that taxing the profits of energy generators could cause problems in the move to decarbonise.

Mr Wheway said: “We’ve got every empathy with the plight of many customers facing difficulties in managing their energy bills, and we welcome action to help those customers.

“But we also share a lot of concern around choices that may be made to apply taxes to energy production which – although they may derive short-term benefits – could cause medium and long-term problems … the industry that we’re in is a very long-term industry and we urge everyone thinking of those things to strike the right balance.”

Mr Sunak has said some generators are seeing “extraordinary profits” as gas prices push up the cost of electricity.

But he was coy when asked by MPS this week when or if such a tax might be introduced.