Kwarteng counters Sunak on oil and gas windfall tax

A WINDFALL tax on oil and gas companies would be “arbitrary and unexpected”, Kwasi Kwarteng has said, after the Chancellor threatened to implement the policy.

The Business Secretary said yesterday that the one-off tax of the profits of energy firms when the UK is trying to invest in them “doesn’t make sense”.

Rishi Sunak said the tax would be “something I’d look at” unless companies did more to support the economy earlier this week, adding “nothing is ever off the table in these things”. Mr

Kwarteng told BBC News: “We want to encourage investment in the North Sea, we want to have domestic sources of supply, and if you are asking a company to invest in North Sea gas, which we need for new technologies as well, it doesn’t make much sense to me to then hit them with a windfall tax which is arbitrary and unexpected.

“I don’t think that is the right way, but I would say that is not for me. That is for the Chancellor of the Exchequer.”

Pressed on whether the Government has ruled out a windfall tax, Mr Kwarteng added: “I am not going to be here on the programme ruling out what the Chancellor is going to do or isn’t going to do in an October budget. That is not my job.”

Labour have argued a windfall tax on oil and gas companies would be a source of money to ease the cost of living, which has increased in recent months because of high energy prices, inflation and a rise in National Insurance.

Sir Keir Starmer has claimed a 10 per cent increase in corporation tax for North Sea oil and gas producers, bringing in around £1.2 billion, could help reduce bills for families by up to £600.

But Mr Kwarteng said there would not be an “emergency Budget” in the coming months to ease the burden, despite calls for the Chancellor to do more for those struggling with prices.

Mr Kwarteng told Sky’s Sophy Ridge yesterday: “There won’t be an emergency budget ... You know as well as I do, and many of your viewers, that budgets are for the Chancellor. All I’m saying is that there’s been considerable amount of support already.”

Sir Keir yesterday called the NI rise a “self-defeating tax at the worst possible time”, but one of his top team refused to commit to scrapping it if Labour were to win power at the next election.

David Lammy, the shadow foreign secretary, refused three times on the BBC to say if a Labour government would do away with the rise, saying it would be “wrong” for him to make fiscal plans ahead of the local elections.

Mr Lammy said: “The election before us at the moment is the local elections, and we’ve said it’s absolutely the wrong time for people to face a National Insurance rise.”

Pressed on if Labour would scrap the rise, he added: “It would be quite wrong if I, as shadow foreign secretary, came on to your show maybe two and a half years out of the general election and set out our fiscal plans at this time.”