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By Todd Gillespie
(Bloomberg) –
According to RBC Europe Limited, a windfall tax on British utilities could be “very short-sighted” and could risk billions of pounds of future investment in the UK.
Such tariffs could cost the country 100 100 billion ($ 125 billion) by 2030 if it discourages investors, RBC analyst John Musk wrote in a note. A major component of the government’s energy security strategy would be “at risk” if plans go ahead due to low confidence in future investments.
Chancellor Rishi Sunak has asked officials to look into a windfall tax on power generators, as well as oil and gas companies, the report said. This is in response to record high energy prices which has led to huge profits for generators but increased bills for households across the UK.
Read more: UK Utilities Plan on Reports Sunak Working on Windfall Tax
According to a note by analysts Morgan Stanley, including Christopher Lebat and Sarah Lester, Drax Group PLC will be among the most affected companies. Drax did not speak to the government about the tax and focused on its bioenergy and hydropower development, a spokesman said in an email statement. Shares fell as much as 19% on Tuesday, the biggest fall in nearly seven years.
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