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Rishi Sunak will endanger UK's energy security with windfall tax, BP boss warns
13 May 2022, 00:43 | Updated: 13 May 2022, 02:11
Rishi Sunak will endanger the UK's energy security if he introduces a windfall tax, the chief of BP has said.
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Bernard Looney warned that introducing the tax would make the UK a less stable environment for investing and stall plans to wean the UK off its dependence on foreign oil and gas.
The Government has faced increased pressure to introduce the tax as Brits continue to suffer from spiralling energy costs.
But Mr Looney explained that BP planned to reinvest all of its profits from the North Sea over the next decade, following a record first quarter for the company.
Mr Looney added: "What's our view on windfall taxes? A stable and competitive fiscal environment is an important element in any investment decision – and that is what we have in Britain today.
"By definition, windfall taxes are unpredictable – and so would challenge investment in home-grown energy. We know that from past experience for the whole of the North Sea sector and supply chain."
The one-off tax would target energy companies which have benefitted from increased demand due to the pandemic as well as supply concerns amid Russia's invasion of Ukraine.
It comes amid calls for Mr Sunak to deliver an emergency summer mini-budget over fears of a recession.
Rachel Reeves, Labour's shadow chancellor, said recent ONS figures for gross domestic product would increase the public's worries.
"Anything less than coming back urgently with an emergency budget to help ease the pressure from the cost of living crisis is a failure by this Conservative government," Ms Reeves said.
Her calls were later echoed by the British Chambers of Commerce.
Mr Sunak responded on Thursday, saying: "The UK economy recovered quickly from the worst of the pandemic and our growth in the first few months of the year was strong, faster than the US, Germany and Italy, but I know these are still anxious times.
"Our recovery is being disrupted by Putin's barbaric invasion of Ukraine and other global challenges but we are continuing to help people where we can."
Boris Johnson told LBC on Thursday that more assistance was in the pipeline.
He said: "I wake up every day thinking about what we can do to help people through this period, just as we helped people through Covid.
"I think a fair-minded person would say that when it came to it, the UK Government stepped up to the plate and came up with some pretty imaginative schemes to get people through the crisis.
"We had the biggest fall in output for 300 years.
"We came up with the Covid programme and many other forms of support.
"Now, that has, in turn, led to a real fiscal problem and so our room for manoeuvre is not as big as I would like, but we will do what we can to help."