Kwarteng and Sunak at odds over windfall tax on energy giants

A CABINET rift has emerged over the energy crisis after the Business Secretary dismissed calls for a windfall tax on oil and gas profits – days after the Chancellor said nothing is off the table.

Rishi Sunak hinted at a possible U-turn on the punitive levy last week as he said he could ‘look again’ at the issue, particularly as Britons face huge rises in household bills.

But Kwasi Kwarteng poured cold water on the idea when asked yesterday about a windfall tax.

The Business Secretary said he has ‘never been a supporter of windfall taxes’.

‘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,’ he told Sky News.

Asked about the Chancellor’s comments, Mr Kwarteng said: ‘My own view is that, and I’ve said this publicly many times, a windfall tax will act as a disincentive to invest and we want to see investment.’

Calls for a lucrative tax on oil and gas firms such as BP and Shell have been growing as their soaring profits have coincided with increased bills and rising inflation.

Ministers had dismissed the Labour-backed levy because it could harm jobs and investment.

Speaking to website Mumsnet, Mr Sunak said firms that benefit from the rise in wholesale oil and gas prices will have to step up investment to boost UK energy security.

He said: ‘If we don’t see that type of investment coming forward and if the companies are not going to make those investments in our country and in our energy security, then of course that’s [a windfall tax] something I would look at.’

Three months ago BP posted its highest annual profit in eight years, while Shell reported record figures.

Mr Kwarteng recently released a letter to the energy sector calling for firms to come forward with clear plans for reinvesting profits into North Sea oil and gas production.