Shapps hints windfall tax not expected in autumn budget

Grant Shapps discusses government's windfall tax plans

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The autumn statement, which had been set for October 31, has been delayed to allow for the new Prime Minister and his Cabinet team to set out a clear economic agenda. Chancellor Jeremy Hunt has confirmed the fiscal statement will now be released on November 17 but has made no commitments as to what the new budget is likely to include. During an interview with Sky News, Business Secretary Grant Shapps gave a telling indication that the autumn statement will not include a further windfall tax on the outrageous profits made by oil and gas corporations.

Sky News host Kay Burley asked: “Profits on fossil fuels, should those be subject to a windfall tax? Is that something that perhaps the Prime Minister should be talking about while he is over at COP27?”

The Business Secretary replied: “I think that might be a clever way of asking me what’s in the autumn statement again. We will be setting that out very shortly.”

He continued: “It is the case that because fuel prices have been so high, there have been unexpected profits. 

“I think it is important that we do carry on investing – making sure, not fossil fuels, but in renewable energy, we have got the capacity, the ability to get that market moving.”

Mr Shapps added: “You will need to wait until the 17th, the autumn statement, for exactly what measures are in there.”

Despite this, Ms Burley noted: “I think you gave us a massive hint there.”

The Cabinet Minister’s focus on “investment” in energy has suggested fossil fuel giants will not be stripped of their enormous profits through an additional windfall tax.

Some oil and gas companies have already warned against an increase to the existing windfall tax as they claimed it could deter investment in renewable energy.

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During his time as chancellor, Rishi Sunak implemented an initial 25 percent energy profits levy against oil and gas corporations in May.

The Treasury predicted this windfall tax would generate £5 billion in tax revenue, although this could be an ambitious target given there are loopholes which have enabled fossil fuel giants to dodge the tax.

Oil company Shell has not paid any of the windfall tax this year despite making record profits. The company claimed its profits had been reinvested into more oil drilling in the North Sea, so technically the firm had not made any UK profits.

Shell has declared it does not expect to pay any of the windfall tax this year, although the company has forecast that some profits in 2023 will go towards the levy.

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The Prime Minister has left the UK for the COP27 summit in Egypt after a u-turn on Number Ten statements that indicated Rishi Sunak would not attend in order to focus on the autumn statement

In collaboration with the Chancellor, it has been reported the Prime Minister could increase the energy profits levy to 30 percent and extend the tax over a three-year term to 2028.

Oil and gas giants already pay 30 a percent corporation tax on their profits as well as a supplementary 10 percent fee. The existing energy profits levy takes this total to 65 percent.

The official spokesman for the Prime Minister has maintained that “no options” are off the table for the upcoming fiscal statement given the turbulent state of the UK economy.

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