Sunak and Hunt’s energy windfall tax is put to the test

And so it begins. French energy company TotalEnergies SE has become the first out of the gate to announce a change of plans for investment directly linked to the energy profits levy brought in by Rishi Sunak this spring, and expanded by Jeremy Hunt. The company says it will cut back its investment plan by 25 per cent next year, which will see roughly £100 million directed elsewhere.

While this is one of the first companies to officially announce investment changes in the North Sea due to the windfall tax, it may not be the last. Shell is making similar noises; the company, so far, has used a loophole which was intentionally worked into the system to allow it to avoid most of the windfall tax by reinvesting its profits instead. But now the company suggests that up to £25 billion could be reallocated as the levy no longer seems like a short-term mechanism.