Chancellor urged to put new windfall tax 'bottom of the list'

North East business group says the Chancellor should rule out another windfall tax on energy firms.

Chancellor Jeremy Hunt urged to put new windfall tax on energy firms ‘bottom of the list’ iStock

Taxing oil and gas firms more should be “bottom of the list” for the new Chancellor, according to a business group.

Jeremy Hunt said “nothing was off the table” when asked about a new windfall tax on energy companies.

But Aberdeen and Grampian Chamber of Commerce said the Chancellor should “check his sums” before “another raid on the North Sea”.

Ryan Crighton, policy director at the Chamber, said: “One of the few financial projections released with the mini-budget was confirmation that the windfall tax already in place will raise £28bn, before its sunset clause kicks in at the end of 2025.

“And that is on top of the £22m North Sea firms are already paying per day in corporation tax.

“Therefore, any suggestion that our offshore energy companies are not paying their way in this crisis are well wide of the mark, in my view.”

The windfall tax was announced earlier this year by a previous chancellor, Rishi Sunak, as a way of funding a package of help to support households with rising energy bills.

Opposition parties had been calling for its introduction and on Monday urged Hunt to extend the tax as he announced a series of U-turns on a previous budget.

Shadow chancellor Rachel Reeves said: “All that is left after these humiliating U-turns are higher mortgages for working people and higher bonuses for bankers.

“And their climbdown on energy support begs the question yet again – why won’t they extend a windfall tax on energy producers to help foot the bill?”

SNP treasury spokesperson, Alison Thewliss said: “I’m not sure words have yet been invented to describe the scale of unmitigated disaster which the Prime Minister and her chancellors have created in the past 24 days.”

The Liberal Democrats leader, Sir Ed Davey, added: “After so many U-turn, surely the Chancellor can persuade the Prime Minister to do one more?

“Will he introduce a proper windfall tax and help struggling families?”

In response, the Chancellor said that “in principle” he was not against the taxing of profits that are “genuine windfalls”.

However, Hunt added: “But as he will know very well in the energy industry, it is very cyclical industry and there are businesses that have periods of feast and famine and you have to be very careful that you don’t tax companies in a way that drives away investment.

“We have said that nothing is off the table.”

The Chamber of Commerce warned that taxing more would be the “wrong approach” when the country tries to secure its future energy and bring down inflation.

However, environmental campaigners have continued to push for the tax to be extended beyond its current end date.

Environmental lawyer and campaigner, Tessa Khan from Uplift, said: “The fact that the windfall tax introduced in May has a massive multi-billion pounds loophole in it, and still doesn’t bring the UK tax rate on oil and gas companies up to the global average, shows that has got to be on the table.

“It would be a hugely irresponsible move not to take that further than it is now.”

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