Businesses warn Keir over energy windfall tax
THE Confederation of British Industry has warned against Labour’s plan to increase the windfall tax on North Sea oil and gas firms.
The interest group, which represents 190,000 businesses, said such a move could hurt investor confidence in Britain.
It added that the next government must commit in its first post-election Budget to ‘no further sector-specific taxes – windfall or otherwise’.
Mohammad Jamei, the CBI’s director of economic policy, said it wanted to revitalise ‘brand Britain’ as an investment destination.
‘We believe that this would do the opposite of that,’ he said.
The Government imposed a 35 per cent levy on UK oil and gas producer profits in 2022 after a jump in energy prices, which means they face an overall tax bill of 75 per cent – a policy that the industry says is already killing off investment and jobs.
Labour wants to increase that to 78 per cent. Mr Jamei said: ‘Any sector-specific taxes will have an impact on investor sentiment which is already in a place where it’s quite challenging.’
Windfall taxes can have a broader impact on investor sentiment regarding Britain, not only for the sector involved, he said.
‘For example, in financial services, they believe, “If it impacts this sector over here what’s to stop the government then bringing in other sector-specific taxes for us”. That’s the real concern that we have, that’s the real risk.’
The CBI also called on the next government to monitor corporation tax compared with other countries to ensure the rate, and tax breaks offered to offset it, are competitive.