Boris Johnson has refused to rule out a windfall tax on the profits of fossil fuel companies to help relieve some of the pressure on families during the cost of living crisis.
Chancellor Rishi Sunak has reportedly told Treasury officials to examine plans for a levy on the soaring profits of the oil and gas giants, putting the move “back on the table”.
It follows an admission by BP chief executive Bernard Looney, who said his firm’s investment plans would not be affected by a windfall tax.
In an interview with LBC, the prime minister suggested that, while he still does not “like” such taxes because of the impact on investment, it is something that will have to be considered.
Pressed on Mr Looney’s comments, Mr Johnson said: “Well, you know, then we’ll have to look it.”
However, the PM said: “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, in new energy supply.”
Mr Johnson added: “I don’t like them. I didn’t think they’re the right thing. I don’t think they’re the right way forward. I want those companies to make big, big investments.”
One government source told The Mail that the idea of a windfall tax was “back on the table” despite being repeatedly being ruled out. Another described it as a “no brainer” after energy firms signalled they wouldn’t pulled investment.
Mr Sunak said on Thursday that he was “pragmatic” on the idea of a windfall tax, as he told reporters he “stands ready to do more” on the cost of living “as we learn more about the situation”.
The chancellor told the BBC: “I’m not naturally attracted to the idea of them [windfall taxes], but what I do know is that these companies are making a significant amount of profit at the moment because of these very elevated prices.”
Mr Sunak added: “There are some people who think windfall taxes can never be the answer. And then there are other people who think windfall taxes are an easy, quick, simple answer to solve every problem. I’m not in either of those schools of thought – I’m pragmatic about it.”
The prime minister will urge cabinet members to “bring the benefits of the Queen’s Speech to life” as they meet for an away-day in Stoke-on-Trent in Staffordshire on Thursday.
Downing Street said ministers will discuss how the new legislation will boost the economy and improve living standards, as well as considering “cost-free” measures to help.
Downing Street was forced to deny that ministers are preparing an emergency budget to deal with the cost-of-living crisis after the PM suggested in the Queen’s Speech debate that there would be more help in the days to come.
Mr Johnson suggested on Thursday that the government will be coming forward with more assistance for hard-pressed families in July.
However, in his LBC interview, Mr Johnson indicated there would be additional support over the summer rather than waiting for the budget in the autumn to act. “There is more coming down the track. July and so on,” he said.
His comments follow the first meeting this week of the government’s cost-of-living committee, where he instructed ministers to come forward with proposals to ease pressure on household budgets.
In a statement ahead of the cabinet meeting, Downing Street said ministers “will continue examining what more we can do to ease the pressures” over the “coming months”.
Separate from the cabinet meeting, ministers are set to visit communities and businesses across the West of England, Midlands and Wales.
