‘Windfall tax’ for low-carbon energy firms in U-turn from Liz Truss

Business secretary Jacob Rees-Mogg has launched plans for a cap on revenues of low-carbon electricity generators, in what effectively amounts to a temporary windfall tax on the sector’s profits.

Labour said that prime minister Liz Truss had been “dragged kicking and screaming” into the U-turn, after months of resisting its calls for further levies on the extraordinary profits being made by the energy companies.

Reports suggest that the cap could limit prices to as little as £50-£70 per megawatt hour – compared to current prices of around £500 – with the government taking as much as 90 per cent of wholesale revenues above this level.