London Daily

Focus on the big picture.
Friday, Feb 20, 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
UK Confirms Preferential U.S. Trading Terms Will Continue After Supreme Court Tariff Ruling
U.S. and U.K. to Hold Talks on Diego Garcia as Iran Objects to Potential Military Use
UK Officials Weigh Possible Changes to Prince Andrew’s Position in Line of Succession Amid Ongoing Scrutiny
British Police Probe Epstein’s UK Airport Links and Expand High-Profile Inquiries
United Kingdom Denies U.S. Access to Military Base for Potential Iran Strike
British Co-founder of ASOS falls to his death from Pattaya apartment
Early 2026 Data Suggests Tentative Recovery for UK Businesses and Households
UK Introduces Digital-First Passport Rules for Dual Citizens in Border Control Overhaul
Unable to Access Live Financial Data for January UK Surplus Report
UK Government Considers Law to Remove Prince Andrew from Royal Line of Succession
UK ‘Working Closely with US’ to Assess Impact of Supreme Court Tariff Ruling
Trump Criticises UK Decision to Restrict Use of Bases in Potential Iran Strike Scenario
UK Foreign Secretary and U.S. State Chief Hold Strategic Talks as Tensions Rise Over Joint Air Base
Two teens arrested in France for alleged terror plot.
Nordic Fracture: How Criminal Scandals and Toxic Ties are Dismantling the Norwegian Crown
US Supreme Court Voids Trump’s Emergency Tariff Plan, Reshaping Trade Power and Fiscal Risk
King Charles III Opens London Fashion Week as Royal Family Faces Fresh Scrutiny
Trump’s Evolving Stance on UK Chagos Islands Deal Draws Renewed Scrutiny
House Democrat Says Former UK Ambassador Unable to Testify in Congressional Epstein Inquiry
No Record of Prince Andrew Arrest in UK as Claims Circulate Online
UK Has Not Granted US Approval to Launch Iran Strikes from RAF Bases, Government Confirms
AI Pricing Pressure Mounts as Chinese Models Undercut US Rivals and Margin Risks Grow
Global Counsel, Advisory Firm Co-Founded by Lord Mandelson, Enters Administration After Client Exodus
London High Court dispute over Ricardo Salinas’s $400mn Elektra share-backed bitcoin loan
UK Intensifies Efforts to Secure Saudi Investment in Next-Generation Fighter Jet Programme
Former Student Files Civil Claim Against UK Authorities After Rape Charges Against Peers Are Dropped
Archer Aviation Chooses Bristol for New UK Engineering Hub to Drive Electric Air Taxi Expansion
UK Sees Surge in Medical Device Testing as Government Pushes Global Competitiveness
UK Competition Watchdog Flags Concerns Over Proposed Getty Images–Shutterstock Merger
Trump Reasserts Opposition to UK Chagos Islands Proposal, Urges Stronger Strategic Alignment
Greek Prime Minister Kyriakos Mitsotakis advocates for a ban on minors using social media.
Liberal Senator Michaelia Cash Accuses Prime Minister of Lying to Australians
Meanwhile in Time Square, NYC One of the most famous landmarks
Jensen Huang just told the story of how Elon Musk became NVIDIA’s very first customer for their powerful AI supercomputer
A Lunar New Year event in Taiwan briefly came to a halt after a temple official standing beside President Lai Ching‑te suddenly vomited, splashing Lai’s clothing
Jillian Michaels reveals Bill Gates’ $55 million investment in mRNA vaccines turned into over $1 billion.
Ex-Prince Andrew Mountbatten-Windsor's arrested
Former British Prince Andrew Arrested on Suspicion of Misconduct in Public Office
Four Chagos Islanders Establish Permanent Settlement on Atoll
Unitree Robotics founder Wang Xingxing showcases future robot deployment during Spring Festival Gala.
UK Inflation Slows Sharply in January, Strengthening Case for Bank of England Rate Cut
Hide the truth, fake the facts, pretend the opposite, Britain is as usual
France President Macron says Free Speech is Bull Sh!t
Viktor Orbán getting massive praise for keeping Hungary safe, rich and migrant-free!
UK Inflation Falls to Ten-Month Low, Markets Anticipate Interest Rate Cut
UK House Prices Climb 2.4% in December as Market Shows Signs of Stabilisation
BAE Systems Predicts Sustained Expansion as Defence Orders Reach Record High
Pro-Palestine Activists Cleared of Burglary Charges Over Break-In at UK Israeli Arms Facility
Former Reform UK Councillors Form New Local Group Amid Party Fragmentation
Reform UK Pledges to Retain Britain’s Budget Watchdog as It Seeks Broader Economic Credibility
×