Ministers row back from extending windfall tax on energy firms
Ministers are rowing back from threatening energy companies with a bigger windfall tax, after Liz Truss and her ally Kwasi Kwarteng made plain they would not support this option.
Nadhim Zahawi, the chancellor, and Kwarteng, the business secretary, will meet energy companies on Thursday morning, but multiple government sources said the discussion would be with electricity generators to discuss investment, wholesale prices and security of supply, rather than a windfall tax.
A business department source made clear Kwarteng was “against windfall taxes” after he previously opposed the imposition of one when Rishi Sunak as chancellor brought it in earlier this year.
The source also cast doubt on whether Zahawi “has the authority” to suggest a windfall tax could be imposed given no policy decisions are being taken before a new prime minister is in place.
The Treasury is believed to want to ensure extending the windfall tax is one of the options on the table, but sources appeared to row back on the idea that it was a leading policy.
Companies invited to Thursday’s meeting are expected to include Centrica, the owner of British Gas; RWE, E.ON, SSE, and National Grid, among others, against a backdrop of soaring household bills and concern that supply of electricity could be tight this winter and feed into even higher prices.
Separately, the consumer campaigner Martin Lewis reiterated his call for immediate action, saying the country faced “a financial emergency that risks lives”, and that Truss and Sunak needed to announce concrete plans now.
Treasury sources had briefed on Tuesday night that a windfall tax on oil and gas producers could go further and faster, with the issue under discussion at the meeting on Thursday.
One told the Sun:
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