Shares in UK utilities climbed after the government said it wouldn’t extend a windfall tax to power generators.
A windfall tax on the profits of oil and gas companies, which will be brought before Parliament this week, won’t apply to electricity generators, the prime minister’s spokesman told reporters. Drax Group, SSE and Centrica all rose on the news.
The proposal was seen as jeopardizing billions of pounds of investment in renewable generation, a key part of cutting emissions by 2050. The tax on oil and gas companies was imposed to help pay for support for households struggling with rising energy bills amid the worst cost-of-living crisis for decades.
The move comes as Boris Johnson plans to step down following a revolt by members of his Conservative party. The premier isn’t supposed to make new policy decisions while he’s in a caretaker role.
“There’s no plans to do that in line with convention, so we will continue to evaluate the scale of the profits and take appropriate steps — but we have no plans to introduce or extend that to that group,” the prime minister’s spokesman Max Blain told reporters.
Drax shares climbed as much as 7.5% to the highest in more than a month, while Centrica advanced as much as 5% and SSE increased 3.9% on the London Stock Exchange.