Shares in energy companies have dropped this morning, as investors analyse yesterday’s 25% windfall tax on oil and gas producers’ profits.
Harbour Energy, the biggest UK North Sea oil and gas producer, have fallen 7.5%, leading the fallers on the FTSE 100 share index.
Electricity generators are also falling, after Rishi Sunak dropped a heavy hint that their extraordinary profits could face higher taxes too. SSE (which runs wind farms and hydro-electric) are down 3%.
Centrica, which holds a 20% stake in the UK’s existing nuclear power plants alongside its North Sea oil and gas production arm, have dropped 5.3%.
Drax, operator of a large biomass power station in North Yorkshire, are down 4.5%.
Investec analyst Nathan Piper says: “In our view, this multi-year tax increase (from 40-65% overall) is likely to check investment in the UK North Sea, with a follow-on impact on jobs and production.
“To some extent, Harbour, given extensive reinvestment opportunities, is able to mitigate the tax. The levy includes an uplift in current capex in an attempt to stimulate investment.”