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The chief executive of BP has said a windfall tax would not affect its investment plans (Photo: BEN STANSALL via Getty Images)
A senior Tory MP has called on Rishi Sunak to reject calls for a windfall tax on the profits of oil and gas companies to help tackle the cost of living crisis.
Andrew Bowie, a former Conservative Party vice-chairman, told HuffPost UK the move would lead to job losses in the North Sea.
The West Aberdeenshire and Kincardine MP said it was the “consensus view” among all of his Scottish colleagues that a windfall tax was a bad idea.
His comments came as it was reported that the chancellor had ordered Treasury officials to assess the impact of a windfall tax, amid growing speculation the government will bring one in.
The government has repeatedly rejected calls from Labour and the Lib Dems for a one-off levy on the bumper profits being enjoyed by energy firms due to the global spike in oil and gas prices.
However, Sunak today left the door open to bringing in a windfall tax unless the companies use their extra cash to increase investment in things like green energy.
“These companies are making a significant amount of profit at the moment because of these very elevated prices,” he told the BBC.
“What I want to see is significant investment back into the UK economy to support jobs, to support energy security, and I want to see that investment soon. If that doesn’t happen, then no options are off the table.”
But Bowie told HuffPost UK: “Scotland’s economy would be damaged most by a windfall tax.
“I’m of the belief that any windfall tax would hamper investment and cause uncertainty in the North Sea.
“BP and Shell could swallow it given the size of their operation, but medium-sized businesses would find it difficult. Any change to the fiscal framework could lead to jobs being lost and a lack of investment.
“It gets raised with me by these firms all the time. They are firmly against it and I agree with them.
“Every time I meet with the chancellor I raise it with him. He says he is looking at a variety of options, but I very much hope it is not a windfall tax.
“The last time I spoke with the chancellor he was of the opinion that a windfall tax was not his favoured option and I hope that is not the direction he is heading in.”
Asked about the government’s position on a windfall tax today, the prime minister’s official spokesman said: “We do keep options on the table – rightly so.
“But, as the prime minister has set out, as the chancellor has said, we do not think this is the right approach.
“We want these companies that are making profits to make further investments. But we are simply not cutting off options given the circumstances that we find.”
This article originally appeared on HuffPost UK and has been updated.