Business Secretary Grant Shapps hints at autumn budget windfall tax expansion on energy firms due to ‘unexpected profits’
Business Secretary Grant Shapps has hinted that the government may extend the windfall tax on oil and gas companies in this month’s autumn budget as it tries to stabilise the UK’s public finances.
Speaking to Sky News with just 10 days to go before the government’s fiscal plans are unveiled, Mr Shapps 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 do carry on investing in making sure not on fossil fuels, but on the renewable energy as well, that we’ve we’ve got the capacity, we’ve got the ability to get that market moving as well.”
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He added that the general public will “have to wait until the 17th” to know exactly which measures the government is going to pursue to tackle what the Resolution Foundation thinktank has said is a £40bn financial black hole.
Last week, an initial report in The Times suggested that Prime Minister Rishi Sunak and Chancellor Jeremy Hunt were planning to extend windfall taxes on oil and gas companies to raise an estimated £40bn over five years.
Mr Sunak and Mr Hunt want to maximise revenues from the windfall tax by increasing the rate from 25% to 30%, extending the policy until 2028, and expanding it to cover electricity generators – according to the paper.
With BP unveiling profits that doubled to more than £7.1bn in the three months to September, pressure is continuing to mount for an enhanced windfall tax on oil and gas giants to help fill the Treasury coffers.
COP26 president Alok Sharma, who was demoted from the cabinet by Mr Sunak, has backed the move, saying: “We need to raise more money from a windfall tax on oil and gas companies and actively encourage them to invest in renewables.”
The Resolution Foundation said in a report last week that tax raises are “likely” to come soon as the government faces an “unpalatable menu” to find ways to re-balance the nation’s finances after former chancellor Kwasi Kwarteng’s ill-fated economic plans.
A combination of tax rises and spending cuts is likely to find the £40bn needed, it said.
Mr Sunak and Mr Hunt are currently figuring out how to tackle the abysmal economic forecast ahead of the autumn statement on 17 November, which was pushed back soon after Mr Sunak reappointed Mr Hunt.
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The Resolution Foundation’s report added that a recession next year could be predicted by the government’s independent forecaster, the Office for Budget Responsibility.
Last week, the Bank of England raised its official interest rates by 0.75 percentage points to 3% and said the UK was already in recession.
It was the single biggest increase in more than three decades.
While GDP forecasts could be cut by up to 4% by the end of 2024.
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The autumn statement this month will likely encompass “rough” tax rises, Sky News has been told by a source in the Treasury.
The tax rises are likely to be across the board, although Mr Sunak and Mr Hunt are said to have agreed those with the “broadest shoulders” should bear the greatest burden, it is understood.
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Few concrete details have emerged but, according to The Times, public sector workers could face deep real-terms cuts to wages, with the Treasury reportedly looking at an increase of 2% across the board for 2023-24, at a time when inflation is expected to be well above that threshold.
The Resolution Foundation has said £9bn could be saved by the government choosing not to raise benefits and pensions in line with rising prices next year, but any such move would have a “huge” impact on those already struggling to make ends meet.
Another option would be to re-instate the health and social care levy to raise £15bn by 2026-2027, while around £2bn could be raised by extending the “stealth” freezes in income tax threshold by a further year to 2026-2027.
Donald Trump has threatened Russia with more sanctions after a series of deadly strikes across Ukraine, as he said of Vladimir Putin: “What the hell happened to him?”
The US president appeared aghast at the conduct of his counterpart in the Kremlin after drone and missile attacks in Kyiv and other Ukrainian cities left 12 people dead and dozens more injured.
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Speaking to reporters at an airport in New Jersey ahead of a flight back to Washington, Mr Trump said: “I’m not happy with Putin. I don’t know what’s wrong with him.”
“He’s killing a lot of people,” he added. “I’m not happy about that.”
Mr Trump – who said he’s “always gotten along with” Mr Putin – told reporters he would consider more sanctions against Moscow.
“He’s sending rockets into cities and killing people, and I don’t like it at all,” he said.
Ukraine said the barrage of strikes overnight into Sunday was the biggest aerial attack of the war so far, with 367 drones and missiles fired by Russian forces.
It came despite Mr Trump repeatedly talking up the chances of a peace agreement. He even spoke to Mr Putin on the phone for two hours last week.
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‘Shameful’ attacks
Volodymyr Zelenskyy has said Ukraine is ready to sign a ceasefire deal, and suggested Russia isn’t serious about signing one.
In a statement after the latest attacks on his country, he urged the US and other national leaders to increase the pressure on Mr Putin, saying silence “only encourages” him.
Mr Trump’s envoy for the country, Keith Kellogg, later demanded a ceasefire, describing the Russian attacks as “shameful”.
Three children were among those killed in the attacks, explosions shaking the cities of Kyiv, Odesa, and Mykolaiv.
Ukrainian siblings Tamara, 12, Stanislav, eight, and Roman, 17, were killed in Russian airstrikes. Pic: X/@Mariana_Betsa
Before the onslaught, Russia said it had faced a Ukrainian drone attack on Sunday. It said around 100 were intercepted and destroyed near Moscow and in central and southern regions.
The violence has escalated despite Russia and Ukraine completing the exchange of 1,000 prisoners each over the past three days.
Donald Trump says he will delay the imposition of 50% tariffs on goods entering the United States from the European Union until July, as the two sides attempt to negotiate a trade deal.
It comes after the president of the European Commission, Ursula von der Leyen, said in a post on social media site X that she had spoken to Mr Trump and expressed that they needed until 9 July to “reach a good deal”.
The US president had last Friday threatened to bring in the 50% tariffs from 1 June, as European leaders said they were ready to respond with their own measures.
But Mr Trump has now said that date has been put back to 9 July to allow more time for negotiations with the 27-member bloc, with the phone call appearing to smooth over tensions for now at least.
Speaking on Sunday before boarding Air Force One for Washington DC, Mr Trump told reporters that he had spoken to Ms Von der Leyen and she “wants to get down to serious negotiations” and she vowed to “rapidly get together and see if we can work something out”.
The US president, in comments on his Truth Social platform, had reignited fears last Friday of a trade war between the two powers when he said talks were “going nowhere” and the bloc was “very difficult to deal with”.
Mr Trump told the media in Morristown, New Jersey, on Sunday that Ms Von der Leyen “just called me… and she asked for an extension in the June 1st date. And she said she wants to get down to serious negotiation”.
“We had a very nice call and I agreed to move it. I believe July 9th would be the date. That was the date she requested. She said we will rapidly get together and see if we can work something out,” the US president added.
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Shortly after, he wrote on Truth Social: “I agreed to the extension – July 9, 2025 – It was my privilege to do so.”
On his so-called “liberation day” last month, Mr Trump unleashed tariffs on many of America’s trade partners. But since then he’s backed down in a spiralling tit-for-tat tariff face-off with China, and struck a deal with the UK.
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Much of his most incendiary rhetoric on trade has been directed at Brussels, though, even going as far as to claim the EU was created to rip the US off.
Responding to his 50% tariff threat, EU trade chief Maros Sefcovic said: “EU-US trade is unmatched and must be guided by mutual respect, not threats.
“We stand ready to defend our interests.”
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