Will Rishi Sunak impose a windfall tax on oil companies in face of rising costs?

Rishi Sunak said he is considering a windfall tax. Credit: PA

In an interview with Mumsnet, Rishi Sunak says that if oil and gas companies do not ramp up investment then he will consider a windfall tax.

His argument has been that tax would deter investment, but the idea is popular and doing very well for Labour.

Some experts I speak to say that a windfall tax - in face of ballooning profits - is a no-brainer.

Politically speaking, the Labour policy is doing incredibly well in their focus groups. Tory strategists know that too. It also means way more help for families - £600 off bills

Tory MPs tell me that everyone is raising cost of living right now, ahead of elections, and some have made clear that voters do not feel that the government has done enough, despite the council tax rebate and so on.

But, come October, even this windfall tax won't be nearly enough.

Senior sources who work in the area of net-zero tell me that the energy security, set out here by business minister Kwasi Kwarteng is great for net-zero in the long run, but does very little for consumers in the short term.

Nuclear, for example, requires big spending right now. Windfall tax and council tax rebates can cut bills. So, of course, could green levies.

There is lots of pressure to cut them, but when we asked Boris Johnson about this on the plane to India he was quite resistant, saying there was "prejudice" against the green agenda.

But there is one option that remains compatible with spending on renewables, which is to move all or at least some of the green levy cost off bills and into general tax.

At least part of the levy is linked to long-term guaranteed spending.