Grant Shapps hints at windfall tax - report

Grant Shapps appeared to hint further windfall taxes on energy companies could be included in the November budget, it was reported on Monday.

Speaking to Sky News, the business secretary said: "I mean, it is the case that because fuel prices have been so high, there have been unexpected profits, of course.

"But I think it’s important that we carry on investing in making sure, not on fossil fuels but on the renewable energy as well, that we’ve got the capacity, we’ve got the ability to get the market moving as well."

He declined to be drawn further, however, telling Sky that the public would "have to wait" until the chancellor’s statement on 17 November.

Wholesale oil and gas prices have soared on the back of Russia invading Ukraine, causing energy bills to rocket while company profits jumped. Last month, BP revealed quarterly profits had more than doubled to $8.2bn, well ahead of analyst expectations.

The government initially resisted widespread calls for a windfall tax on energy companies, but eventually then-chancellor Rishi Sunak announced a "temporary, targeted energy profits levy" of 25% in May, to run until the end of 2025, although he also announced 90% tax relief for firms that invest in oil gas extraction in the UK.

Boris Johnson’s replacement as prime minister, Liz Truss, then announced that renewable power companies would also have their revenues capped, despite previously opposing windfall taxes. Now prime minister, Sunak has yet to comment officially on windfall taxes, although The Times reported last week that along with his chancellor, Jeremy Hunt, he was considering increasing the rate to 30%, extending it until 2028 and expanding it to include electricity generators.

The government is widely expected to unveil a raft of spending cuts and tax rises in the wake of previous chancellor Kwasi Kwarteng’s ill-fated economic plans.

Last week, the Bank of England increased interest rates to 3%, the biggest hike in 30 years, as it looked to curb inflation, and warned that the UK faced the longest recession for a century.