Rishi Sunak should expand windfall tax on ‘excessive’ oil profits, says Cop26 president

Senior Tory Alok Sharma speaks out on loopholes encouraging fossil fuel investment

Rishi Sunak’s government should expand a windfall tax on the “excessive” profits of the oil giants, outgoing climate minister Alok Sharma has said.

The senior Tory – president of the Cop26 summit – urged the new prime minister to go further in taxing the fossil fuel giants, saying current windfall tax was not raising “significant” amounts.

It comes as Mr Sunak faces criticism for snubbing the upcoming Cop27 climate conference in Egypt, as No 10 revealed that King Charles has been advised not to attend the crucial climate summit.

Mr Sharma said he would “very much like” Charles III to be at the conference, as he spoke out on the limitations of the windfall tax imposed earlier this year.

“These are excessive profits, and they have to be treated in the appropriate way when it comes to taxation,” he told The Guardian.

Mr Sharma added: “We ought to be going further and seeing what more can be done in terms of raising additional finance [from the profits]. So far, at least, the level of money raised is obviously not significant.”

The former minister, who left cabinet during this week’s reshuffle, criticised loopholes which incentivise yet more extraction of fossil fuels from the North Sea.

Shell this week admitted it had managed to avoid paying the existing levy, despite a doubling of profits fuelled by soaring energy prices – only adding to calls for an extended windfall tax on companies amid a cost of living crisis.

Finance boss Sinead Gorman told reporters on Thursday that the company had done enough over recent months to avoid the windfall tax – companies are allowed to get tax relief in exchange for investment.

“There really is an incentive for these companies to do more in terms of oil and gas,” said Mr Sharma. “What we want them to do, if we are to meet our target of 100 per cent clean energy by 2035, is to accelerate the renewables rollout.”

Calling for more incentives to boost renewable investment, he said: “That is the way you get faster delivery of renewable energy across the UK. What we want to see is a big expansion in renewables.”

The King has been advised not to attend the Cop27 summit, No 10 revealed on Friday, arguing it is not the “right occasion” for him to make the trip.

Downing Street conceded for the first time on Friday that Charles had been urged not to attend the UN conference in Sharm El-Sheikh and said it was “unanimously agreed” – with Mr Sunak also ruling out going.

Speaking before the confirmation, Mr Sharma said Charles had been “focused on this for decades … I would very much like him to be there but ultimately that is a matter between him and the government”.

Boris Johnson loyalist Nadine Dorries, the former culture secretary, said Mr Sunak was “wrong not to go”, tweeting: “Global warming is the biggest crisis facing our planet and net zero creates many 100s of jobs which is good for the economy.”

The ban on shale gas fracking in the UK will be reinstated, Mr Sunak announced earlier this week – a move described as “incredibly positive” and “setting a good tone” by environmentalists.

But the chief executive of the UK’s first fracking company Cuadrilla said it “beggars belief" that Mr Sunak has decided to bring back a ban after it was lifted with great fanfare during Liz Truss’s six-week premiership.