Boris Johnson today stopped short of ruling out a windfall tax on energy giants despite insisting he ‘doesn’t like’ the idea.
The PM left the door open to a one-off levy after Rishi Sunak put the prospect ‘on the table’, ordering officials to work on the details.
Ministers had previously dismissed calls for a windfall tax to help ease the cost-of-living crisis, warning it could damage investment in energy infrastructure.
But the Chancellor is said to be alarmed that industry giants have done little or nothing to increase their spending despite raking in enormous profits.
Senior Tory MP Robert Halfon backed the move this morning, saying oil companies had been ‘ripping off’ motorists by not reducing pump prices when global costs fell.
He denied that the policy would be ‘un-Conservative’ – pointing out that Margaret Thatcher did it in ‘time of need’.
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 said 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 (at) it.’
However, he added: ‘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.
‘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.’
Ministers were stunned by comments from BP chief Bernard Looney, who said his firm’s investment plans would not be affected by a windfall tax.
Mr Looney also described his company as a ‘cash machine’.
The idea of a tax grab is said to be ‘back on the table’ to help families with the cost of living crisis without pushing public borrowing even higher.
One insider said that a one-off levy was a ‘no-brainer if the chief executives themselves are saying they have no problem with it’.
Mr Halfon labelled oil company bosses ‘the new oligarchs’ as he called on the Government to hit them with a windfall tax.
Speaking on BBC Radio 4’s Today Programme, the Education Select Committee chair said the Government had done ‘a fair bit’ to tackle the cost-of-living crisis but that families were still struggling with food and energy bills.
Mr Halfon said: ‘I do think that the Government should consider properly a windfall tax.
‘Oil companies or oil bosses are the new oligarchs – one of them earning a salary over £76million, getting a £4.5million bonus.’
Pressed on the oligarch claim, the Harlow MP pointed to ‘the way oil companies are ripping off motorists at the pump by not reducing the price quickly when the oil price falls internationally’.
Arguing that windfall taxes were not ‘un-Conservative’, Mr Halfon argued: ‘Margaret Thatcher did it, David Cameron has done it, Conservative governments have imposed windfall tax on oil companies in times of need.’
Mr Johnson 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, Staffordshire.
Downing Street said ministers will discuss how the new legislation will boost the economy, improve living standards and level up opportunities across the country.
Mr Johnson suggested that the Government will be coming forward with more assistance for hard-pressed families in July.
Downing Street was forced to deny that ministers are preparing an emergency budget to deal with the cost-of-living crisis after the Prime Minister suggested in the Queen’s Speech debate on Tuesday that there would be more help in the days to come.
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.
‘But what we will do is use all the ingenuity and compassion that we have and the fiscal firepower that we have as a result of the strong economic growth we had coming out of the pandemic.
‘Our growth will return very strongly in the next couple of years.’
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.