Rishi Sunak has confirmed that the government will introduce a windfall tax on oil and gas company profits. After weeks of rejecting calls for such a measure, the chancellor said he is now "sympathetic to the argument" for imposing a tax on the companies making money out of the energy crisis.
Announcing a package of economic support after regulator Ofgem predicted that the energy price cap will rise to around £2,800 in October, Mr Sunak told MPs in the House of Commons: “The oil and gas sector is making extraordinary profits not as the result of recent changes to risk-taking or innovation or efficiency, as the result of surging global commodity prices driven in part by Russia’s war. For that reason, I am sympathetic to the argument to tax those profits fairly.”
A temporary one-off tax of 25 per cent will be applied to extraordinary profits of oil and gas giants. Mr Sunak said this “energy profits levy” will raise around £5 billion in a year to assist with the surging cost of living.
