Kwarteng fears windfall tax will deter investors
KWASI KWARTENG has said he is still opposed to windfall taxes despite the Government introducing one last month.
The Business Secretary told MPS that he was against the taxes “on principle” and hoped that the Government’s raid on oil and gas producers would not deter investment.
Rishi Sunak, the Chancellor, increased taxes on oil and gas producers’ profits from 40 per cent to 65 per cent last month, and is exploring extending the tax to electricity generators.
Ministers are raising cash to ease the pressure on households from energy bills, which climbed 54 per cent in April and could jump by a further 42pc in October to hit £2,800.
But they have faced warnings from industry that tax raids will spook investors just as the UK energy sector needs to fund the shift to greener energy and shore up domestic supplies.
Responding to questions in the House of Commons yesterday, Mr Kwarteng said: “Issues relating to taxation are a matter for [the] Chancellor of the Exchequer.
“As far as his windfall tax is concerned, I have always been opposed to them on principle and I continue to be opposed. I hope that this Energy Profits Levy does not discourage investment – and it actually has features in it that do attract greater investment.” The tax applies to profits from May 26 and allows firms to offset some investments in UK oil and gas production. The Government still needs to pass legislation to bring the measure into force.
Under collective responsibility, ministers are expected to vote with the Government once policy has been agreed, or resign. It is understood Mr Kwarteng does plan to vote in favour of the proposals when legislation is introduced, given the incentives for investment.
It comes as Lord Frost, the former Brexit minister, said that all of the tax increases brought in under Mr Johnson should be scrapped. He told Radio 4’s World At One: “It is not conservative to be raising taxes and it is undermining growth and prosperity.”