It’s fair to say Rishi Sunak has been on a journey when it comes to windfall taxes.
Earlier this year, when he was still chancellor, he said he was “not naturally attracted” to one-off levies on energy firms’ bumper profits.
Sunak - and other senior Tories - argued that it would stop them investing in things like green technology.
But as the state of the nation’s finances have worsened - and the profits being made by energy firms have continued to soar - Sunak has warmed to the idea.
In May, as Labour’s call for a windfall tax grew louder, he said he was “pragmatic” about the idea and that “no options are off the table”.
Later that month, Sunak gave in to pressure and announced his own windfall tax to help fund the government’s plans to tackle the cost of living.
But it did not go as far as Labour’s proposed levy as it offered generous tax breaks to energy firms investing their bumper profits in oil and gas extraction rather than pocketing them.
Sunak said his “temporary, targeted energy profits levy” of 25% would raise around £5 billion and end in 2026.
However, Treasury sources have confirmed to HuffPost UK that the prime minister and chancellor Jeremy Hunt are in talks to extend the tax until 2028 and also increase it to 30%.
Full details of the plan will be unveiled at the autumn statement on November 17, when Hunt will set out the tax rises and public spending cuts the government plans to introduce to balance the nation’s books.
It is estimated that extending the windfall tax will raise £40 billion over the next five years.
That will go some way to filling the estimated £50 billion black hole which is currently in the government’s finances, although billions of pounds worth of further tax rises and spending cuts will still be needed.
It is understood that the Treasury is also looking at increasing the amount of tax paid on dividends on shares as another way of raising much-needed cash.
The scale of the economic crisis facing the UK - thanks in large part to Liz Truss and Kwasi Kwarteng’s disastrous mini-budget - was highlighted by the Bank of England’s decision increase interest rates by 0.75% today.
It means mortgage rates are set to rise once again, piling fresh pressure on householders already struggling as a result of rising inflation and high energy bills.
