Now Liz Truss could U-turn over a windfall tax: Chancellor Jeremy Hunt considering raiding profits of banks and energy giants to fill spending black hole despite PM ruling out the idea just a WEEK ago

• PM ruled out punitive levy during summer leadership campaign and last week
• But Mr Hunt is now said to be considering unveiling a new tax on October 31 
• On Monday told the Commons he was ‘not against the principle’ of windfall taxes

Liz Truss could be bumped into yet another embarrassing U-turn as new chancellor Jeremy Hunt considers a new windfall tax on banks and energy giants. 

The PM ruled out a punitive levy against gas companies during her leadership campaign and reiterated her position as recently as last week.

But Mr Hunt is now said to be considering unveiling a new tax on October 31 to help fund a massive fiscal black hole when he announced his spending cuts, the Financial Times reported.

Earlier this week Mr Hunt told the Commons he was ‘not against the principle’ of windfall taxes – which have a high level of support among the general public – and refused to rule out such a move.

Banks have been added to the ranks of energy firms because of the extra cash they are making due to higher interest rates, the FT said. 

 Lloyds Banking Group and Natwest Group Plc led losses among bank stocks after the story broke. The UK’s banking index was down 0.6 per cent, while the investment banking & brokerages index dropped 1.6 per cent.

The PM ruled out a punitive levy against gas companies during her leadership campaign and reiterated her position as recently as last week.

Energy firms were subject to a windfall tax earlier this year but the head of Shell earlier this week backed a new one.

Ben van Beurden said that governments may need to tax energy firms to help the poorest cope with soaring energy costs.

He told an industry conference in London that surging prices threatened social stability.

‘You cannot have a market that behaves in such a way… that is going to damage a significant part of society,’ he said.

‘One way or another there needs to be government intervention that somehow results in protecting the poorest.

‘That probably may then mean that governments need to tax people in this room to pay for it.’    

Last week at Prime Minister’s Questions, Mr Truss told Labour she was against tax rises, saying: ‘The way we are going to get our country growing is through more jobs, more growth and more opportunities, not through higher taxes, higher spending and his friends in the unions stopping hard-working people getting to work.’

But her economic plans have been almost completely destroyed since then, with Mr Hunt undoing most of them on Monday. 

In the Commons, Lib Dem leader Sir Ed Davey called on the Chancellor  to ‘undo one of the Government’s biggest injustices’, adding that this was ‘it’s failure to impose a proper windfall tax on the record profits of the oil and gas companies earned only because Putin is killing innocent Ukrainians’.

Sir Ed asked: ‘After so many U-turns, surely the Chancellor can persuade the Prime Minister do to one more? Will he introduce a proper windfall tax and help struggling families?’

Mr Hunt replied: ‘Let me tell him – I am not against the principle of taxing profits that are genuine windfalls. But as he will know very well in the energy industry, it is a very cyclical industry and there are businesses that have periods of feast and famine and you have to be very careful that you don’t tax companies in a way that drives away investment.

‘We have said that nothing is off the table.’

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