UK chancellor hints at windfall tax on energy companies to ease cost of living crisis

Rishi Sunak does not want to deter investors but 'nothing is off the table'

Britain's Chancellor Rishi Sunak suggested he had not ruled out a windfall tax on energy firm's profits. AFP

Oil and gas companies could be slapped with a windfall tax, Britain’s Chancellor Rishi Sunak has suggested, despite previously dismissing the policy.

Amid mounting pressure on the government to ease the strain of the cost of living crisis for families, Mr Sunak hinted at a possible U-turn on energy firms.

He told Mumsnet he had previously shied away from the idea because he did not want to deter investors in new oil and gas extraction, and pointed to a recent £25bn investment by one company in the North Sea.

But signalling a possible change in stance on windfall tax, Mr Sunak said: “What I would say is that if we don’t see that type of investment coming forward and companies are not going to make those investments in our country and energy security, then of course that’s something I would look at and nothing is ever off the table in these things.”

Labour and the Liberal Democrats had called on Mr Sunak to introduce a windfall tax on energy firms’ profits but their proposal was shot down.

Mr Sunak’s signalling of a possible U-turn came just hours after Dominic Raab, the justice minister and deputy prime minister, said introducing a windfall tax would be “disastrous and damaging”.

Prime Minister Boris Johnson also rejected it at prime minister’s questions in the House of Commons on Wednesday, branding it a “tax on business”.

Mr Sunak made his latest comments during a question and answer session with Mumsnet, a London-based online forum for parents.

The chancellor urged users not to “judge him” by his bank balance.

In recent weeks Mr Sunak has faced questions over his family’s finances after it emerged his wife, Akshata Murty, holds a non-domiciled status in the UK, which means she does not have to pay UK taxes on her overseas income.

Following a row, Ms Murty, the daughter of an Indian billionaire, announced she would pay taxes in the UK on the income she earned overseas.

During the interview with Mumsnet, Mr Sunak was asked how someone in his financial position can empathise with people struggling to feed their families.

He harked back to his grandparents who emigrated to the UK “with very little”.

“Of course now I’m in a fortunate position but I didn’t start like that, that’s not how my family started.”

He said he is “trying to help people manage through some of the challenges we’re seeing with rising prices and I’ll never forget where I came from and the values that I was raised with”.