The Financial Times reports that new chancellor Jeremy Hunt is considering raising a windfall tax on energy companies and banks.

He is said to have told a cabinet meeting on Tuesday, 18 October, that ministers will need to make tough spending cut decisions in his effort to appease a jittery market.

An influx of cash from banks and energy companies would be one way of alleviating savage cuts and claims that the government is returning to its austerity years.

Currently, banks pay a surcharge of 8% of profits in addition to corporation tax, which will be lowered to 3% from 1 April 2023.

Additionally, the surcharge allowance, currently at £25m, is pencilled in to be raise to £100m on the same date.

The Financial Time calculates that lowering the surcharge to 5% would bring in an extra £500m per year as banking profits currently stand.

It reports the Treasury as commenting: “We can’t comment on specific speculation, however the chancellor and prime minister have been clear that difficult decisions will be required to restore economic stability and no options are off the table.”

UK Finance chief executive David Postings says: “We urge the government to consider the surcharge very carefully and not put at risk the competitiveness of the UK’s banking and finance industry, which is the engine of the economy, providing jobs and investment up and down the country.”