(Bloomberg) -- UK Business Secretary Kwasi Kwarteng warned energy companies they may face a windfall tax if they don’t “step up” on new investments, but refused to say how much they must spend to avoid it.
“We want to see spending -- I’m not going to quantify it -- but we want to see actual real spending, and there’s evidence that they’re doing that,” Kwarteng said Friday in an interview with Bloomberg TV in the US. Companies are “very aware that if they don’t step up to that plate then they may well be subject to a windfall tax. I think that’s a reasonable conversation.”
Kwarteng’s comments come as Boris Johnson’s government faces intense pressure to offer more support to Britons struggling with the worst squeeze on living standards since the 1950s as inflations surges. The idea of a windfall tax on energy firms, who have benefitted from rising prices, is gaining political support including among some members of the UK ruling Conservative Party.
But ministers are worried a levy risks deterring investment, while more traditional Tories are against a policy they regard as being anti-business. Kwarteng made clear his preference is not to impose a windfall tax, while stressing that Chancellor of the Exchequer Rishi Sunak retains the option to impose one if needed.
Kwarteng said companies including Shell Plc and BP Plc know what the government expects of them, and ruled out demanding firms set out their commitments in writing.
“I think the commitments are already there, I’m not sure that we need any kind of legal document or quasi-legal document,” he said.
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