Another windfall tax on North Sea oil and gas firms could boost the UK economy and help households struggling to pay their bills, a Dundee University expert said.
Professor Morris Altman, who chairs the university’s business school, suggested Rishi Sunak would be wise to carry out a second raid on multinational firms to improve the nation’s finances.
The economics expert said: “If he increased taxes on the oil and gas industry, that will probably be seen as calming the markets.”
Energy companies have reaped record profits this year while working families and businesses across Tayside and Fife endure soaring energy bills.
Last month angry Dundee residents raged against the cost-of-living crisis on BBC’s Debate Night and said more help was needed.
Some families in Tayside have been left struggling to afford food.
In May, Mr Sunak imposed a temporary 25% tax on excess cash earned by oil and gas firms when he was still chancellor despite previously opposing the levy.
Months later, Liz Truss announced the Tories would step in and fund energy companies to cap heating prices for the next two years.
However, critics warned taxpayers would be left paying back the costs further down the line and insisted oil and gas firms should foot the bill instead.
Measures including a rent freeze and increased benefits payments have been introduced by Nicola Sturgeon’s government at Holyrood.
UK Chancellor Jeremy Hunt said he was not against the “principle” of windfall taxes after taking over the treasury and admitted “nothing is off the table”.
Prof Altman claimed the markets would likely react positively to Mr Sunak’s appointment after the financial turmoil during Ms Truss’ spell in Downing Street.
He said: “Rishi Sunak has an ideological slant, except he’s much more nuanced.
“As long as he doesn’t do the type of thing that Kwasi Kwarteng and Liz Truss did, the markets will be calmed.”
‘Profound economic crisis’
Mr Sunak warned Britain faced a “profound economic crisis” as he took power.
Major tax cuts introduced by Ms Truss during her brief tenure at No10 have been abandoned and it’s feared more austerity could follow.
Prof Altman warned cutting spending could make the situation even worse and claimed even workers who get a pay rise will be tightly squeezed due to the cost-of-living crisis.
He said: “I don’t think Rishi Sunak has to slash spending, because that has to do with infrastructure, which is also in bad shape.
“If the government cuts spending right now, we’ll end up in a deeper recession.”
A second windfall tax would be controversial in the industry.
Energy firm bosses oppose the levies and warned in May the measure could disrupt investment.