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Rishi Sunak is considering a windfall tax on electricity generators, as well as oil and gas giants, in a move that would mark a humiliating U-turn for the Tory Chancellor, according to reports.

The Government has been under heavy pressure to act to help struggling households with the exploding cost of living in Britain as food and energy prices shoot up.

According to the FT, Mr Sunak has instructed Treasury officials to work on plans for a potential tax on more than £10bn of excess profits made by electricity generators, including windfarm operators.

The plan would go beyond Labour ’s proposals for a one-off levy applied only to North Sea oil and gas producers, predicted to raise an estimated £2bn.

Profits on these firms are taxed at 30% corporation tax plus a 10% surcharge, but Labour has proposed raising the combined rate from 40% to 50%.

Energy giants have been netting record profits amid rocketing prices Russia ’s war in Ukraine pushes up global wholesale prices.

Russian President Vladimir Putin ( SPUTNIK/AFP via Getty Images)

But Treasury sources have insisted no decision has yet been made on any windfall tax plan.

Asked about possible measures on Monday, Chief Secretary to the Treasury Simon Clarke poured cold water on the idea, saying ministers were “not going to rush into action”.

Asked when Mr Sunak might decide, he told the BBC : “That is a question for the Chancellor.

“We obviously recognise that we are in a situation which is fast developing and we want to make sure that we are supporting people ahead of what will likely be a challenging autumn and winter ahead.

“I’m not going to set a specific timetable for that, but the Chancellor is clear that we are looking at the situation with real urgency and intent.

“And it is against this backdrop that people can be reassured that the Government is on the case.

“We are not going to rush into action, but at the same time nor are we going to sit here and not provide the support that is needed given the severity of the situation.”

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