Kwasi Kwarteng warns Shell and BP they must invest in the UK as a ‘quid pro quo’ after Chancellor Rishi Sunak threatened to tax windfall profits on massive profits
Kwasi Kwarteng is urging Shell and BP to invest in the UK as a ‘quid pro quo’ after Rishi Sunak threatened to impose a windfall tax on their huge profits.
The business secretary will deliver a clear message to companies in an online meeting, as they prepare to announce windfall profits amid war in Ukraine.
It is understood that Mr Kwarteng will tell leaders they must commit money to North Sea and offshore wind projects in return for government support for renewable energy and drilling projects.
The talks come after Rishi Sunak fired a warning shot at companies reaping huge benefits from soaring oil and gas prices while families grapple with bills.
The Chancellor has indicated he will ‘revisit’ a windfall tax as he faces pressure to act on the current cost of living crisis.
Ministers previously rejected such a levy – backed by Labor – because it could hurt jobs and investment.
But Mr Sunak said it would be on the table unless companies helped improve the UK’s energy security.
Business Secretary Kwasi Kwarteng will deliver a clear message to energy firms in an online meeting as they prepare to announce windfall profits amid war in Ukraine
Shell and BP urged to invest in UK as ‘quid pro quo’ after Rishi Sunak threatens to impose windfall tax on their huge profits
Mr Johnson is due to meet with energy companies next week – when they are due to provide updates on their revenues just before a crucial round of local elections.
But there are concerns that although broad promises of investment have been made, there have not been enough specific announcements.
Demand is growing for a one-off tax after oil giant BP posted its highest annual profit in eight years in February and announced more returns for shareholders while Shell boasted of ‘momentary’ profits of 12 billion pounds sterling.
At the same time, families have felt the pinch, amid rising bills, runaway inflation and tax hikes.
In an interview with MumsNet earlier this week, Mr Sunak said that, taking advantage of rising wholesale gas and oil prices, there was a need to step up and reinvest to make the UK less dependent on foreign power .
“If we don’t see that kind of investment coming forward and if companies don’t make those investments in our country and in our energy security, then of course that’s (a windfall tax) something I would look at.”
He warned that “nothing is ever out of place in these things”.
Downing Street has made clear it is reluctant to pursue such a course – but has not ruled it out.
“We don’t think this particular approach is the right one, but it’s fair that we keep all options on the table,” Mr Johnson’s official spokesman said.
In an interview earlier this week, Mr Sunak said a windfall tax would be on the table unless companies helped improve the UK’s energy security.