London Daily

Focus on the big picture.
Monday, Oct 19, 2026

Rishi Sunak: windfall tax an option if oil firms fail to invest in UK

Rishi Sunak: windfall tax an option if oil firms fail to invest in UK

Chancellor says he is ‘pragmatic’ about introducing a levy on energy companies to ease cost of living crisis

Rishi Sunak has insisted he is “pragmatic” about the idea of a windfall tax on energy companies, claiming “no options are off the table” in the clearest sign yet that the government is planning measures to tackle the cost of living crisis.

Labour has been calling for a windfall tax on oil firms, which have benefited from rocketing global prices, with the shadow chancellor, Rachel Reeves, suggesting the proceeds be used to cut domestic energy bills.

Sunak and Boris Johnson had previously suggested such a tax would disincentivise investment in the North Sea.

They appear to be warming to the idea, however, amid intense pressure to do more to help hard-pressed households weathering surging inflation. It is understood Treasury officials are working up possible options.

Sunak told the BBC in an interview on Thursday that he was “not naturally attracted to windfall taxes in general” but was “pragmatic about it”.

“These companies are making a significant amount of profit at the moment because of these very elevated prices,” the chancellor said. “What I want to see is significant investment back in the UK economy to support jobs, to support energy security, and I want to see that soon. If that doesn’t happen then no options are off the table.”

Bernard Looney, the chief executive of BP, said at the company’s annual meeting in London on Thursday that a windfall tax could discourage investment in the UK – though he said it would not affect BP’s immediate plans.

“By definition windfall taxes are unpredictable – and so would challenge investment in home-grown energy,” he said.

BP was planning £18bn of investments in the UK over the next eight years, which he said were not contingent on whether or not there was a windfall tax. “We’re also backing Britain because it is a great place to invest your money,” he added. “We would love to invest even more – and one of the key foundations of any such decisions will be a stable fiscal environment.”

He said BP’s UK tax bill would “rise four to five times this year – to well over £1bn”, arguing “we rightly pay higher taxes” due to higher oil prices and profits.

Looney refused to say whether he had spoken directly to the prime minister regarding a windfall tax. Asked why he had commented publicly, he said: “We wanted to put our position on the record.”

Sunak had already hinted at a shift in his position in a Mumsnet interview last week. The business secretary, Kwasi Kwarteng, is known to be less enthusiastic, however, saying: “I think it discourages investment.” An aide said Kwarteng remained opposed to windfall taxes in principle.

Johnson appeared to echo that view on Thursday, telling LBC radio: “The disadvantage with those sorts of taxes is that they deter investment in the very things that they need to be investing in – new technology, new energy supply.” He did not rule out such a measure, however.

The shadow environment secretary, Ed Miliband, said: “The case for a windfall tax on the oil and gas giants making record profits whilst energy bills spiral for working people has been clear since Labour first proposed it in January. The Conservatives have opposed it at every turn. Now, as their excuses are wearing thin, we hear that they are finally considering it. But how much more time does this government need to make up its mind, whilst the British people suffer?”

The chair of Tesco, John Allan, added his voice to calls for a windfall tax earlier this week, as did the senior Conservative backbencher Robert Halfon.

Allan said: “I think there’s an overwhelming case for a windfall tax on profits from those energy producers, fed back to those most in need of help with energy prices. I think that would be the single biggest thing that could be done.”

Sunak’s spring statement in March included several significant tax cuts, including an increase in the national insurance threshold that partly offset the impact of the health and social care levy.

But he was criticised for failing to do enough for the poorest people. A recent survey by the Food Foundation thinktank found that more than 2 million adults had gone without food for an entire day in the past month because they could not afford to eat.

Sunak has said he wants to wait until the Treasury has more information about how sharply energy prices are set to rise in the autumn before taking more action. But he dropped a hint on Thursday that new measures were coming, telling Sky News he was “ready to do more”.

“I know these are anxious times, and because the challenges we face are global in nature, I can’t just make them all disappear. But where we can make a difference, of course, we are, and that’s why we’re investing billions of pounds already to support families and businesses through some of the challenging times ahead,” he said.

Newsletter

Related Articles

0:00
0:00
Close
Northern Ireland Secures Favorable Agricultural Export Agreement with European Union
Scottish Government Approves Major Offshore Floating Wind Farm Near Aberdeenshire
High Speed Two Rail Project Faces Three Billion Pound Cost Escalation on Initial Phase
National Health Service Warns of Winter Capacity Crisis Across English Hospitals
Tata Steel Confirms Two Thousand Job Cuts at Port Talbot to Fund Green Transition
Global Microchip Developer Announces Three Billion Pound Semiconductor Plant in Cambridge
United Kingdom Artificial Intelligence Safety Institute Proposes Mandatory Licensing for Generative Models
United Kingdom Commits Additional Long-Range Weapons and Air Defenses to Ukraine
British Chancellor Overhauls Infrastructure Financing to Bypass Borrowing Constraints
Bank of England Holds Benchmark Interest Rate at Four Point Five Percent
First Minister Rhun ap Iorwerth Confirms Constitutional Discussions Over Welsh Independence During Initial Bilateral Call with Prime Minister
Labour Party Instructs Local Council Groups to Sever Power-Sharing Accords with Green Party Over New Controversial Policy Positions
Institute for Fiscal Studies Warns of Thirty-Five Billion Pound Fiscal Gap Ahead of Chancellor John Healey Upcoming Autumn Budget
House of Lords Backs Landmark Legislative Amendment to Decriminalize Abortion Across England and Wales
United Kingdom Defence Secretary Wes Streeting Travels to Pentagon for High-Level Strategic Talks Amid Escalating Tensions Over Ukraine and United States Policy Shifts
Bank of England and International Monetary Fund Officials Issue Urgent Warnings Regarding Potential Artificial Intelligence Financial Market Shocks
Reform UK Faces Severe Political Fallout and Scrutiny After Undercover Media Investigations Reveal Systemic Racism Among Candidates
Former Democratic Unionist Party Leader Jeffrey Donaldson Sentenced to Fifteen Years in Prison Following Landmark Child Sexual Abuse Trial
House of Lords Votes to Amend Schools Bill Implementing Comprehensive Social Media Ban for Children Under Sixteen Years of Age
International Monetary Fund Upgrades United Kingdom Growth Forecast for Two Thousand Twenty-Six While Warning of Energy-Driven Inflation Pressures
Competition and Markets Authority Launches Formal Inquiry Into Corporate Artificial Intelligence Partnerships
Automotive Industry Leaders Urge Westminster to Accelerate Electric Vehicle Charging Infrastructure Rollout
Home Office Expands Digital Border Security Framework With Mandatory Electronic Travel Authorizations Across United Kingdom
Northern Ireland Executive Reaches Final Consensus on Public Sector Pay Reform and Budget Allocations
Welsh First Minister Secures Additional Funding for Rural Agricultural Transition and Sustainable Farming Schemes
Scottish Government Unveils Accelerated Regional Infrastructure Strategy to Boost Clean Energy Manufacturing
National Health Service England Launches Emergency Recruitment Drive to Alleviate Severe Acute Care Winter Backlogs
Bank of England Monetary Policy Committee Signals Cautious Approach to Interest Rate Reductions Amid Persistent Wage Growth
British Government Finalizes Emergency Energy Support Package to Protect Households From Winter Price Surges
Russell Brand Trial Begins at Southwark Crown Court
UK Parliament to Debate Climate Risks and Council Tax Following Public Petitions
Department for Transport Demands Safety Audits Following Regional Rail Disruptions
House of Lords Scrutinizes Amendments to Armed Forces Bill
Devolved Administrations in Scotland and Wales Criticize Post-Brexit Funding Framework
Prime Minister Andy Burnham Defends Middle East Military Support Under Parliamentary Scrutiny
NHS Leaders Warn of Severe Pressure on Hospitals from Winter Virus Outbreaks
Retailers and Business Groups Lobby Chancellor for Relief from Rising Employment Taxes
City of London Taskforce Urges Radical Reform to Prevent UK From Becoming "Incubator Nation"
Bank of England Officials Signal Potential November Interest Rate Hike
Institute for Fiscal Studies Warns of £35 Billion Funding Gap in Upcoming Autumn Budget
IMF Upgrades UK Growth Forecast to 1.3% for 2026
Former UUP leader Jeffrey Donaldson sentenced to 15 years in prison for historical child sex offences
UK ministers adopt independent commission blueprint to fast-track AI in the NHS
Labour leadership orders local councillors to end power-sharing deals with Green Party
UK government considers regulatory intervention in proposed Sky and ITV merger
Environment Agency declares severe drought across six English regions as reservoirs hit critical lows
NHS England issues new guidance prohibiting transgender women from female-only wards
Norwegian teenager sentenced to 20 years for part of Iran-backed assassination plot in Britain
UK government threatens complete visa ban on Eritrea over refusal to accept deportees
UK Treasury lobbies UBS to move global headquarters to London amid banking sector tax threats
×