Boris Johnson rules out windfall tax on electricity firms
Outgoing prime minister Boris Johnson has ditched mooted plans to introduce a windfall tax on electricity generators.
The former chancellor Rishi Sunak had floated the prospect of slapping electricity firms with a tax similar to the energy profits levy on North Sea oil and gas operators.
A decision on whether to press ahead with the tax had been expected this week. Johnson’s spokesman Max Blain was asked on Monday whether the energy profits levy would be extended to electricity generators and he said: “We would not seek to make any new policies or major fiscal decisions. So there’s no plans to do that.
“We will continue to evaluate the scale of the profits and consider appropriate steps but there’s no plans to introduce or extend that to that group.”
The move sent shares in listed power companies shooting up. Shares in Drax, the operator of the eponymous North Yorkshire power station, rose 6%, while SSE rose 3% and the British Gas owner, Centrica, jumped 3%. All three suffered punishing sell-offs when it emerged in May that Sunak was considering extending the tax to generators.
Adam Berman, a deputy director at the trade body Energy UK, said: “A windfall tax on generators would deter, delay and raise the cost of the investment we need to reach both our domestic energy security and climate change targets.”
The SSE chief executive, Alistair Phillips-Davies, had said a windfall tax could hinder work on building up domestic energy supplies.
In May, Sunak announced the energy profits levy as part of a £15bn package of measures to tackle the cost of living crisis. He hoped to raise £5bn from the tax. A vote on the levy is expected to take place in parliament on Monday evening.
Before its introduction, the business secretary, Kwasi
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