London Daily

Focus on the big picture.
Tuesday, Oct 07, 2025

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
France: Less Than a Month After His Appointment, the New French Prime Minister Resigns
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Sarah Mullally Becomes First Woman Appointed Archbishop of Canterbury
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
US Prosecutors Gained Legal Approval to Hack Telegram Servers
Macron Faces Intensifying Pressure to Resign or Trigger New Elections Amid France’s Political Turmoil
Standard Chartered Names Roberto Hoornweg as Sole Head of Corporate & Investment Banking
UK Asylum Housing Firm Faces Backlash Over £187 Million Profits and Poor Living Conditions
UK Police Crack Major Gang in Smuggling of up to 40,000 Stolen Phones to China
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Trump Proposes Farm Bailout from Tariff Revenues Amid Backlash from Other Industries
FIFA Accuses Malaysia of Forging Citizenship Documents, Suspends Seven Footballers
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
A Dollar Coin Featuring Trump’s Portrait Expected to Be Issued Next Year
Australia Orders X to Block Murder Videos, Citing Online Safety and Public Exposure
Three Scientists Awarded Nobel Prize in Medicine for Discovery of Immune Self-Tolerance Mechanism
OpenAI and AMD Forge Landmark AI-Chip Alliance with Equity Option
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
×