Rishi Sunak threatens energy firms with windfall tax

The chancellor has threatened to hit energy companies with a one-off "windfall" tax if they don't invest enough in new projects.

Rishi Sunak added that he wanted to see investment "soon" to boost energy security, and "no options are off the table" if not.

Opposition parties want to tax oil and gas firms' soaring profits to help households grappling with rising bills.

Treasury officials have been ordered to examine a potential tax, a source said.

In an interview with the BBC, Mr Sunak said he was not "naturally attracted" to the idea of a windfall tax, but he was "pragmatic" about introducing one.

Speaking to LBC radio, Prime Minister Boris Johnson said the government would "have to look" at the proposal if not enough investment was made.

Energy firms have been posting huge profits this year, amid soaring prices for gas and oil as economies restart after Covid lockdowns.

Labour, the Lib Dems and the SNP are all calling for a windfall tax on their profits to pay for tax cuts and benefit boosts, to help households cope with rising living costs caused by spiralling inflation.

The government has argued such a tax could deter the investment it wants to see in new energy infrastructure - but has not ruled one out.

Asked by BBC economic editor Faisal Islam about the prospect of windfall taxes, Mr Sunak said: "I'm not naturally attracted to the idea of them.

"But what I do know is these companies are making a significant amount of profit at the moment because of these very elevated prices.

"What I want to see is significant investment back into the UK economy to support jobs, to support energy security, and I want to see that investment soon.

"And if that doesn't happen, then no options are off the table."