All The Times Tory Ministers Said A Windfall Tax Was A Bad Idea

Rishi Sunak is set to lead yet another government U-turn on Thursday, this time on a tax on oil and gas companies' profits.
The Tory cabinet is about to make another U-turn announcement today
The Tory cabinet is about to make another U-turn announcement today
Daniel Leal via PA Wire/PA Images

The chancellor is expected to reveal a windfall tax on Thursday in a bid to ease the cost of living crisis, even though the Tories have been shouting down the proposal for weeks.

The one-off levy is likely to fund a new support package and help households facing a huge squeeze on the finances due to inflation, increasing energy bills and higher national insurance tax.

Oil and gas producers have seen their profit margins grow due to the soaring global energy prices prompted by the war in Ukraine. The tax on these finances may make more than £7 billion in profit, according to some estimates.

Some reports suggest Sunak will now cut energy bills by £400 through the windfall tax, but the government has not exactly been enthusiastic about the suggestion from the get-go.

Here’s a breakdown of all the times Tory ministers dismissed the idea.

Boris Johnson: ‘Not for this government’

When pressed in PMQs by Keir Starmer about the windfall tax only last week, the prime minister said: “This government is not in principle in favour of higher taxation.”

Claiming that this was more of a Labour pursuit than a Conservative one, Johnson continued: “What we want to do is take a sensible approach governed by impact on investment and jobs.”

It’s worth noting that the government did actually increase national insurance tax only in April.

Boris Johnson: ‘Not the right thing’

The prime minister also told LBC two weeks ago that a windfall tax would reduce investment from oil and gas companies.

“The disadvantage with those sorts of taxes is that they deter investment in the very things that they need to be investing in – new technology, in new energy supply.”

He did not rule it out completely, but added: “I didn’t think they’re the right thing. I don’t think they’re the right way forward. I want those companies to make big, big investments.”

Boris Johnson: Oil and gas companies ‘don’t want a windfall tax’

At the beginning of the month, the prime minister said these large firms “don’t want a windfall tax”, claiming: “That is because it would stop investment in new technology and new green power that we need.”

This claim came after the boss of BP suggested his company would still want to invest even if it had to pay a windfall tax.

Rishi Sunak: Not ‘naturally attracted’ to this idea

Speaking to the BBC, Sunak said: “I’m not naturally attracted to the idea of windfall taxes in general.”

However, he conceded that he was still on the fence about the idea, explaining: “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 in the UK economy to support jobs, to support energy security and I want to see that soon.

“If that doesn’t happen then no options are off the table.”

Sajid Javid: ‘I don’t like it’

The health secretary told the Welsh Conservative conference over the weekend that it went against his political beliefs to back such a tax.

He said: “Instinctively I don’t like it. I just think we’ve got to be really careful.

“As a country, we have a very hard-won but strong reputation on being pro-business, welcoming investment.”

He added that a windfall tax “could have an impact in the long-term that we would come to regret”.

Liz Truss: ′There’s a cost in imposing such a tax’

The foreign secretary did acknowledge that the UK was in a “very, very difficult economic situation” at the moment, but claimed the government should be cutting taxes rather than introducing one on energy companies.

She told Sky News: “The problem with a windfall tax is it makes it difficult to attract future investment into our country, so there is a cost in imposing a tax like that.”

Kwasi Kwarteng: ‘Never been a supporter’

Kwarteng told the BBC’s Sunday Morning Show on May 15 that he was firmly opposed to the tax. The business secretary went on to tell Sky News: “I’ve never been a supporter of windfall taxes.

“I have been very clear on that publicly, I think it discourages investment and the reason why we want to have investment is because it creates jobs, it creates wealth and it also gives us energy security.”

Brandon Lewis: ‘Doesn’t work’

The Northern Ireland secretary claimed that the proposal “sounds attractive but doesn’t work”. He said to The Daily Telegraph: “It puts off investment both in that sector and, absolutely, the risk in others.”

He added that ministers were “all very right to be wary of windfall taxes”, explaining: “I’m a Conservative, I believe in a low tax economy. We want to see as much money in people’s pockets as we possibly can and businesses investing in high productivity and high skilled high paid jobs.”

He accused Labour of prioritising “a few headlines” over supporting business” in the opposition party’s bid to champion a windfall tax.

Suella Braverman: ‘Not a great idea’

The attorney general told Conservative Home last week that she did not back the proposal. “I don’t think a windfall tax would be a great idea, if I’m honest. I think that we want to incentivise investment. Profits are not an enemy of Conservatives. Profits mean more investment. Profits mean more research. Profits mean more jobs.”

Dominic Raab: ‘Frankly ill thought through’

The justice secretary and deputy prime minister told Sky News at the end of April: “If you look at Labour’s policy of a windfall tax, that would damage investment in energy supplies we need and hike bills. It’s disastrous. It’s not serious.”

Jacob Rees-Mogg: ‘Retrospective taxation is difficult’

The Brexit opportunities minister explained his opposition to the proposal last week: “I’m merely saying there is this honey pot of business you can just raid whenever you feel like is not true.”

“Retrospective taxation is difficult because you are changing the understanding of what people do when they invest.”

He told reporters: “I think the idea of a windfall tax as a panacea to the inflation problem is wrong.”

So why are the Tories introducing it again?

Inflation has reached a 40-year high at 9%, although the poorest households are experiencing an average inflation rate even higher at 10.9%. Millions of UK adults have admitted to skipping at least one meal a day to cut costs, while the UK economy as a whole is lagging behind the rest of the G7 in the wake of pandemic recovery.


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