THE government appeared to be “rattled” by the prospect of a windfall tax today after Business Secretary Kwasi Kwarteng called the plans “arbitrary,” but refused to rule one out.

Mr Kwarteng told Sky’s Sophy Ridge that imposing higher taxes on oil and gas companies would be a “disincentive” to investments by corporations.

But he did not rule out that the move, long called for by Labour, is being considered by the government as a measure to alleviate the cost-of-living crisis.

It comes after Chancellor Rishi Sunak raised the possibility earlier, saying: “If we don’t see that type of investment coming forward, and if the companies are not going to make those investments in our country and in our energy security, then of course that’s something I would look at.”

Mr Kwarteng said he is instead trying to press North Sea oil and gas firms to reinvest their profits so more drastic action is not required.

He has written to the industry demanding a “very clear plan” to spend profits on accelerating domestic production and clean energy before a meeting in coming weeks.

Labour said the government is “rattled” because oil and gas producers are making “soaring profits” while bills rocket.

Shadow climate change secretary Ed Miliband said: “Kwasi Kwarteng’s letter is not worth the paper it is written on for millions of families facing the cost-of-living crisis.

“Families want action to deal with the bills crisis, not a vacuous, insulting piece of political spin.

“The only way to actually make a difference is to do the right, fair and principled thing and impose a one-off windfall tax on oil and gas producers’ profits to provide real help to families now and put in place a green energy sprint in the years ahead.”

Labour leader Sir Keir Starmer said that a £600 reduction in energy bills funded by a one-off tax on oil and gas super profits is “desperately needed.

Mr Kwarteng also suggested that there will not be an “emergency budget” to give further support to tackle the cost-of-living crisis, before walking back on the comments.

He told Ridge: “There won’t be an emergency budget…”

But questioned further, he said: “I’m not ruling it out, it’s not in my power to do that.

“All I’m saying is that there’s been a considerable amount of support already.”