Kwasi Kwarteng warns Shell and BP they must invest in the UK as a ‘quid pro quo’ after Chancellor Rishi Sunak threatened windfall tax on massive profits
Kwasi Kwarteng is urging Shell and BP to invest in the UK as a ‘quid pro quo’ after Rishi Sunak threatened a windfall tax on their massive profits.
The Business Secretary will deliver a stark message to the companies during an online meeting, as they prepare to announce bumper profits amid the war in Ukraine.
It is understood Mr Kwarteng will tell executives they need to commit money to the North Sea and offshore wind projects in return for government support for renewables and drilling projects.
The talks come after Rishi Sunak fired a warning shot at firms reaping huge benefits from soaring oil and gas prices while families struggle with bills.
The Chancellor signalled he would ‘look again’ at a windfall tax as he faces pressure to act on the current cost-of-living crisis.
Ministers had previously dismissed such a levy – backed by Labour – because it could harm jobs and investment.
But Mr Sunak said it would be on the table unless firms were contributing to improving the UK’s energy security.
Business Secretary Kwasi Kwarteng will deliver a stark message to energy companies during an online meeting, as they prepare to announce bumper profits amid the war in Ukraine
Shell and BP are being urged to invest in the UK as a ‘quid pro quo’ after Rishi Sunak threatened a windfall tax on their massive profits
Mr Johnson is due to meet energy companies next week – when they are due to provide updates on earnings just before a crucial round of local elections.
But there are concerns that while broad investment pledges 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 ‘momentous’ £12billion profits.
At the same time families have been feeling the pinch, amid rising bills, soaring inflation and tax rises.
In an interview with MumsNet earlier this week, Mr Sunak said that benefiting from the increase in wholesale gas and oil prices needed to step up and reinvest to make the UK less reliant on foreign power.
‘If we don’t see that type of investment coming forward and if the companies are not going to 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 off the table in these things’.
Downing Street made clear it was reluctant to pursue such a course – but did not rule it out.
‘We don’t think this particular approach is the right one but it is right 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 firms were contributing to improving the UK’s energy security
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