Government Downplays Talk Of Extending Energy Windfall Tax

Ministers are rowing back from threatening energy companies with a bigger windfall tax after Liz Truss and her ally Kwasi Kwarteng made plain they would not support this option.

- Rowena Mason and Peter Walker

Nadhim Zahawi, the chancellor, and Kwarteng, the business secretary, will meet energy companies today, but multiple government sources said the talks would be with electricity generators to discuss investment, wholesale prices and security of supply rather than a windfall tax.

A business department source made clear that Kwarteng was “against windfall taxes” after he previously opposed the imposition of one when Rishi Sunak when as chancellor brought it in earlier this year.

The source also cast doubt on whether Zahawi “has the authority” to suggest a windfall tax could be imposed, given that no policy decisions are being taken before a new prime minister is in place.

The Treasury is believed to want to ensure that extending the windfall tax remains among the options on the table, but sources appeared to seek to downplay the idea that it was a leading policy.

Companies invited to today’s meeting are expected to include the owner of British Gas, Centrica, E.ON, SSE and National Grid, among others, against a backdrop of soaring household bills and concern that electricity supply could be tight this winter and feed into even higher prices.