Politics

Windfall tax cannot be ruled out amid ‘extraordinary’ cost of living pressure says Treasury minister

Energy companies have been told by the government that “all options are on the table” if they do not reinvest their bumper profits – amid a growing clamour for a windfall tax.

Simon Clarke, chief secretary to the Treasury, acknowledged the “extraordinary pressure on family finances” and said imposing such a levy could not be ruled out.

It appeared to be the strongest hint yet from the government that a windfall tax, first proposed by Labour and which would be used to help offset the cost of living crisis, could be adopted.

However it is understood that the prime minister and other members of the cabinet are yet to be convinced.

Mr Clarke told Sky News’s Kay Burley that the government recognised the “real challenge for households up and down the country” which is likely to worsen again in the autumn when the energy price cap rises again.

He added: “On the concept of a windfall tax itself, we are very very clear that there is a real need at a time when the industry is making very significant profits to see those profits reinvested in new offshore installations – getting more out of the North Sea, which is obviously vital in terms of energy supply but also good for jobs and the wider economy.

“If we do not see that investment materialise then we are very clear that all options are on the table.”

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The comments come after Jesse Norman, the former Treasury minister, became the latest Tory MP to embrace the idea of a windfall tax given the “extraordinary times” and arguing that Mrs Thatcher “in her pragmatic prime” would have backed it.

George Osborne, the former chancellor, told Channel 4’s Andrew Neil show on Sunday that he believed Rishi Sunak would eventually do so.

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