Bill and
Explanatory Notes at the bottom of the page
Energy (Oil and Gas) Profits
Mr Deputy Speaker ( )
None of the amendments has been selected, so I call the Minister
to move the motion.
6.55pm
The Financial Secretary to the Treasury ()
I beg to move,
That provision may be made for, and in connection with, imposing
a charge on ring fence profits of companies (within the meaning
of Part 8 of the Corporation Tax Act 2010).
This Bill deals with the taxation of extraordinary profits in the
oil and gas sector, but it is important to remember that its
effect is to allow us to focus on supporting families up and down
the country at this difficult economic time. The Bill will help
us to raise revenues and support families while continuing to
encourage investment in North sea oil and gas.
(Bristol North West) (Lab)
I wonder whether the Treasury has made any assessment yet of how
much money will be raised by this windfall tax, given the debt
that will need to be taken on as a result of the tax cut for
those drilling for fossil fuels. Is there an estimate of how much
the Minister intends to raise by these means?
The estimate of the amount that the measure will raise is £5
billion over the course of the first year. I start by
highlighting the context for our introducing the Bill. The oil
and gas sector is making extraordinary profits. Those profits are
not the result of recent changes to risk-taking, innovation or
efficiencies; they are the result of surging global commodity
prices, driven in part by Russia’s war. The profits are over and
above what analysts and businesses in the sector could have
expected to earn. Indeed, since early last year, oil prices have
nearly doubled and gas prices have more than doubled. The Bill is
being introduced at a time when many of our constituents are
struggling with the cost of living, and at a time when we have
said that the Government will support the most vulnerable and the
least well off in getting the support that they need.
I would like to touch on how the Bill ensures that we tax
extraordinary profits fairly while incentivising investment. To
do that, we are introducing the energy profits levy, a new 25%
surcharge on the extraordinary profits that the oil and gas
sector is making. At the same time, the new 80% investment
allowance will mean that businesses will, overall, get a 91p tax
saving for every £1 they invest. This provides them with an
additional immediate incentive to invest. That nearly doubles the
tax relief available and means that the more investment a firm
makes, the less they will pay. As set out in the energy security
strategy, the north will still be a foundation of our energy
security, so it is right that we continue to encourage investment
in oil and gas. The Government expect the energy profits levy,
with the investment allowance, to lead to an overall increase in
investment.
I want to make clear what the investment allowance will apply to.
First, the allowance will be calculated in the same way as the
investment allowance for the existing supplementary charge.
Therefore, if capital or operating expenditure qualifies for the
supplementary charge allowance, it will qualify for the energy
profits levy allowance, but unlike the supplementary charge, it
will be available to companies at the point of investment. This
makes it both more immediate and more generous. As the levy is
targeted at the extraordinary profits from oil and gas upstream
activities, it makes sense that any relief for investment must
also be related to oil and gas upstream activities. Such spending
can be used to decarbonise oil and gas production—for example,
through electrification—so any capital expenditure on
electrification, as long as it relates to specific oil activities
within the ringfence, will qualify for the allowance. Examples of
activity that may be carried out for specific oil activities
include expenditure on plant and machinery such as generators,
which includes wind turbines, transformers and wiring.
We have also been listening closely to feedback from industry. We
published draft legislation for the Bill on 21 June to seek
technical feedback. Two weeks ago, the former Chancellor met
industry stakeholders in Aberdeen to discuss the levy—not just to
communicate the aims of the levy and how it will fund vital
support for families, but to ensure that the levy works as the
Government intended. That is why I can confirm that the
Government are making a change to the legislation. I confirm that
tax repayments that oil and gas companies received for petroleum
revenue tax related to losses generated by decommissioning
expenditure will not be taxed under the levy. Since wider
decommissioning expenditure is also left out of account for the
levy, that change is consistent and fair. We are very grateful
for the engagement that we have had with industry on the matter.
When the Bill is published, this will be made clear. To reassure
the House, with this change, the Government still expect the levy
to raise about £5 billion over the next year.
Finally, let me turn to how long the levy will be in place. It
will take effect from 26 May this year and it will be phased out
when oil and gas prices return to historically more normal
levels. A sunset clause will also be written into the legislation
so that, by the end of 2025, the levy will automatically cease to
be in place. The energy profits levy is temporary, with a set
lifespan that raises about £5 billion revenue over the next year,
so that we can help families with the cost of living in the shape
of significant, targeted support to millions of the most
vulnerable.
7.01pm
(Ealing North) (Lab/Co-op)
We have been waiting for many months for this day to come, but
here we finally are: I am referring not to the news that has
broken within the last hour outside this Chamber, but to the fact
that the Government are finally implementing a windfall tax, even
if the Minister absolutely refused to say those words in her
remarks.
The Conservatives are finally introducing a windfall tax on oil
and gas producers’ profits more than seven months after the
shadow Chancellor, my hon. Friend the Member for Leeds West
(), first set out Labour’s
plans for one. In the seven months since Labour first called for
a windfall tax, the cost of living pressures facing people across
the country have grown relentlessly and oil producers’ profits
have soared.
Since the start of the year, energy bills have spiralled by £700
for a typical household. Inflation has risen to 9.1%, the highest
level in 40 years, and taxes on working people’s pay have jumped
thanks to the Government’s decision to hike national insurance
contributions. This year has seen the cost of living rise
unremittingly, while oil and gas producers’ profits have in some
cases tripled.
A fair solution has been staring the Government in the face: levy
a one-off windfall tax on North sea oil and gas producers’
extraordinary profits and use that money to help to cut people’s
energy bills at home. Yet when, on 9 January this year, the
shadow Chancellor first called on the Government to levy such a
tax, Conservative MPs were falling over themselves to oppose it.
The Education Secretary—as it happens, a former oil industry
executive—came out firmly opposing a windfall tax on oil and gas
producers on the ground that they, the oil producers, were
already “struggling.” The Business Secretary said:
“I’ve never been a supporter of windfall taxes.”
The Northern Ireland Secretary said that he thought that a
windfall tax
“sounds attractive but doesn’t work”.
The Deputy Prime Minister claimed that it would be
“disastrous”.
Ministers and their Back-Bench Conservative colleagues then went
on to vote against our plan for a windfall tax on three separate
occasions. So, despite our common-sense plan for a windfall tax
receiving wide support across the country—with even some oil
producer bosses backing its logic—Conservative Ministers simply
refused to get on board until 26 May, the day after the report was published, when the Prime Minister and the
former Chancellor suddenly changed their minds. It seems clear
that what finally caused the Conservative leadership to change
course and back a windfall tax was the need for a different set
of headlines in that week’s news. Whatever it took to get the
Prime Minister and the former Chancellor over the line, we were
relieved that they finally agreed to back a windfall tax. We were
relieved that some help with soaring energy bills was finally on
its way.
But that is no way to run the country—and what a cost those
months of delay have had. For every day that Conservative
Ministers refused to act, £53 million has been added to Britain’s
household bills during this cost of living crisis. Next Monday,
when we consider the Bill that will follow the resolution, the
Opposition will urge Ministers to make right their delay in
introducing the windfall tax. Otherwise, their months of delay
will leave the public finances missing out on billions of pounds
of tax revenue that could have supported further help for people
with the cost of living.
We know from the draft Bill and from what the Minister said that
the Government are planning to introduce a brand-new tax break
for oil and gas producers. That will give money back to the same
firms that are supposed to be paying their fair share through the
windfall tax. The Minister was unable to answer when my hon.
Friend the Member for Bristol North West () intervened, but our analysis
shows that that tax break could lead to a third or more of any
revenue from the new levy being handed straight back to the oil
and gas producers.
It is a subsidy that even oil executives do not seem to think
necessary. It will subsidise projects that would almost certainly
have happened anyway, and it will see 20 times more being given
in taxpayer incentives to oil and gas producers than to firms
investing in the renewable energy of the future, yet the
Government seem determined to push ahead with their tax break.
When we consider the Bill next Monday, we will urge Ministers to
think again about that unnecessary tax break for oil producers,
which will undermine both the impact of the windfall tax and our
country’s wider efforts to tackle the climate crisis.
We are relieved that the Government are finally proceeding with a
windfall tax, and we will support the motion, but the
Conservatives’ whole approach has shown so much of what is wrong
with the way they conduct themselves in power. When we called for
a windfall tax, they spent months opposing it as strongly as they
could. They dismissed a fair and common-sense way, which was
staring them straight in the face, to help people who face
soaring energy bills. Then they changed course, not because it
was the right thing to do, but because they needed a new headline
to take attention away from the Prime Minister’s lack of
integrity in office. Now, as they finally reveal the detail of
their windfall tax proposals, they immediately undermine its
effectiveness, and any wider efforts to tackle climate change,
with a new tax break for oil producers. Their instincts are
wrong. Their priorities are wrong. The way they run our country
is wrong. With the windfall tax, we have shown that Labour is
winning the battle of ideas in Britain, and that Labour will
provide the leadership that our country needs.
7.07pm
(Poole) (Con)
As the motion relates to a Treasury matter, may I pay tribute to
the former Chancellor, my right hon. Friend the Member for
Richmond (Yorks) ()? He had to get the country
through a difficult period in the pandemic. He produced a number
of interesting schemes, such as the furlough and the
self-employment income support scheme, where the software worked
and where people were helped. I think he was very creative in the
way he handled a difficult situation. I know that it is not
always easy for senior politicians to take decisions such as the
one that he has taken today. I wish him well, along with the
former Secretary of State for Health and Social Care, my right
hon. Friend the Member for Bromsgrove (). We will see how events
unfold.
Let me start by taking a traditional Conservative position and
saying that I do not like windfall taxes. The North sea is a
tremendous British success story. We have got oil out of deep
seas using technology, investment and British initiative over
decades and we have benefited the nation in doing so. We are a
nation that has oil and gas all the way around its coast, as
Professor Peter Odell used to say in the 1970s. It is just a
question of whether it is viable to get it out, and whether the
tax and investment regime is good enough.
The North sea is quite mature now. Although the rise in prices is
unwelcome for motorists, it certainly gives the opportunity to
extend the life of some fields and makes other oil fields with
more marginal prospects more viable. If we are looking for a
resilient future for our country, getting the best out of our
natural resources in the transition to net zero, I think we ought
to have a stable tax network, not act like a Venezuelan junta by
jumping in and trying to take money away from oil companies. And
what are oil companies? They are normally vehicles for pension
funds for lots of elderly people living up and down the country
who rely on that income to pay their cost of living bills. There
is no such thing as a painless tax rise. There is no magic money
tree if we go and punch the oil and gas companies in the mouth. I
think this is a very short-sighted policy. It may raise money,
but the consequences are long term, and it may have an impact on
investment.
Apart from the creation of an oil industry, there are thousands
of jobs in oil services in and around Aberdeen, in many other
parts of the United Kingdom and, now, worldwide. I think we ought
to be proud of what this country has achieved, and we ought to be
doing what we can to support those well-paid and important jobs
as we go towards net zero.
I am not going to divide the House today. I do not think I would
get a seconder, as I am probably the only person who is against
the windfall tax at the moment, but we will see how this
transpires. I think that a stable tax system in which people in
the oil and gas industry can look decades ahead—because
investment decisions sometimes take decades—is a much better way
of dealing with the situation.
(Bristol East) (Lab)
I understand the hon. Gentleman’s arguments, although I do not
agree with them, but has he an alternative proposal for helping
people to bring down their energy bills? I am sure that many of
his constituents are deeply worried about how they will make ends
meet, particularly with the next increase in bills coming this
autumn. How does he suggest we help them?
I am not sure that the £5 billion raised from the oil companies
will find its way into the pockets of people who are worried
about their energy bills. As far as I know, it is going into the
Treasury.
I return to my original simple point. The Government have already
undertaken a number of measures to help with bills; the problem
is the lag between the decision making and the assistance that
they are giving. So there is always more pressure to do more. I
am hopeful that, as we proceed, people will suddenly see some of
the bail-out help with bills that the Government have already
factored in. But I think that a stable tax system is a better way
of proceeding than adding a higher levy on top of corporation tax
rates, which are already higher than the rates for most other
companies. Let us not forget that many of these oil companies
were losing money 18 months ago when we were in lockdown.
I am unhappy with this policy. I will find it interesting to see
how the Government bring the positives forward. I am pleased that
they have listened to representations—and the former Chancellor
was talking to the oil industry—but I think that in the long term
this is bound to have a negative effect on investment in the
sector, and that what we should be doing is cherishing and
encouraging the sector so that we import less from other
countries and give ourselves more resilience and security of
supply.
That is really all that I wanted to say. I wanted to make my
reactionary right-wing comments about windfall taxes, and I did
not want the motion to go through without my putting them on the
record.
7.13pm
(Glasgow Central)
(SNP)
It is a pleasure to see you in the Chair, Mr Deputy Speaker. What
a strange evening for us to be making speeches in the House.
While the Minister did a good job of putting forward the policy,
we have to ask who the Chancellor will be by the time the Bill
comes to the House next week and, indeed, whether it will still
stand when it does come.
The Tories have come here today with a “temporary refund
adjustment”, an “energy profits levy”, a windfall tax by any
other name. It is a tax that Tory Members were vehemently against
all the way up to the point when the now former Chancellor
announced it, yet he still came to the Treasury Committee to tell
us that he did not believe in windfall taxes. So I can only
speculate that this may be one of the reasons why he chose to
resign this evening—one of the areas in which he and the Prime
Minister apparently disagreed in private—and one of the reasons
why he was no longer prepared to give a speech on the economy
with the Prime Minister next week, as planned.
Today we see the UK Government finally getting round to doing
something about these excess profits; as always, at the coo’s
tail. They have the full suite of economic powers to act, but
they continue, again and again, to lack the will or the
imagination to do so—to support people through a cost of living
crisis that they helped to create.
The SNP has been consistent in calling for a windfall tax on
excess profits since June 2020, in response to the soaring
profits then being made by Amazon and other online retailers
during the pandemic. My colleague in the Scottish Parliament and
evangelist for Paisley, , raised that issue and the
Scottish Government Finance Secretary certainly agreed with the
principle. It is disappointing that this UK Government, and
indeed the official Opposition, have looked only narrowly and in
a limited fashion at oil and gas and ignored all the other areas
where super-extraordinary profits have been soaring during this
pandemic.
Today we see Scotland’s oil and gas resources being used yet
again to bail out the UK Treasury. The Tories have made a very
specific choice to focus their raids on super-profits not just on
Scotland but on one particular part of Scotland: the north-east.
Aberdeen and the towns around it have contributed
significantly—over £300 billion—to the UK balance sheet, yet when
it comes to carbon capture and storage or the Scottish cluster,
that area is left on the subs bench, waiting on a list instead of
leading a just transition. The UK Government will not even match
the Scottish Government’s commitment to the just transition
fund.
I have listened carefully to those in the oil and gas industry,
and the lack of predictability and consistency in the taxation
regime comes up again and again. When the industry expert Nathan
Piper gave evidence to the Treasury Committee back in March, he
spoke powerfully about the impact this has on confidence and
investment. Yes, we know that oil and gas can be volatile, but
when we look just across the water to Norway, we see a reliable
stewardship of resources and the world’s largest sovereign wealth
fund. Scotland, look at what you could have won, had it not been
for the squandering and mismanagement of our natural resources by
each and every UK Government since the first drop of oil was
extracted. Schrödinger’s Scotland: a country too poor to be
independent but simultaneously so rich that the UK Government can
use Scotland’s North sea as a £5 billion cash machine.
In the early years of North sea oil and gas, revenues were used
to pay for Thatcher’s mass unemployment. Gordon Brown’s raid in
the early 2000s was used to pay for cuts to fuel duty, and the
current Tory Government are now zoning in on oil and gas to
tackle their own Brexit cost of living crisis when other options
are available to them. This comes at a time when the Treasury is
raking it in from additional tax receipts from the soaring prices
of fuel, energy and goods, giving the former Chancellor an extra
£30 billion of fiscal headroom in his budget.
What of the environment and the promises made at COP26? The new
investment allowance is, in the Treasury’s own words, an
“incentive for the oil and gas sector to invest in UK
extraction”.
It is as though the Treasury has forgotten that COP26 happened at
all. This is clearly contrary to the Scottish and UK Governments’
climate objectives and to the commitments they made to the world
last November. The UK Committee on Climate Change has stated:
“An end to UK exploration would send a clear signal to investors
and consumers that the UK is committed to the 1.5°C global
temperature goal.”
Where stands that commitment now? We on the SNP Benches welcome
investment, but any incentives must be balanced across sectors
and encourage sustainable investment towards a just transition
and into renewables, rather than the short-term, carbon heavy
investment that the former Chancellor was encouraging. We also
know that any investments from this are unlikely to have an
impact on our household energy bills anytime soon, but that is
where this crisis lies.
A further source of worry to those not in the oil and gas sector
is the now former Chancellor’s plans for a further raid on other
energy producers, putting at risk Scotland’s key renewables
sector. The former Chancellor refused to tell me in the Treasury
Committee whether he had even picked up the phone to the Scottish
Government to discuss these plans with them. He talked about
extraordinary profits, but could not define what they were and
who was making them. The Secretary of State for Business, Energy
and Industrial Strategy seems to know little of the plans,
passing the buck back to the Treasury. All of this is undermining
confidence in a sector that could not be more crucial to the
future of our planet.
What happens now? When will we hear further details of those
plans? The Chancellor claimed a month ago that it would be in
“weeks”. Will the plans for other energy producers come forward
before the recess? Will the Minister put a date on it? Will there
be more tax breaks for renewable development, or is it only oil
and gas exploration that get the tax breaks? Will these measures
be spliced into the Bill next week? Will we even see a Bill next
week? This is more short-termism, more inconsistency and more
poor stewardship of Scotland’s resources by a Government we did
not elect. Scotland is a renewables powerhouse, and we on these
Benches will resist any attempt to stifle that industry and to
raid the profits. It used to be said that it is Scotland’s oil.
We can now say that it is Scotland’s wind, Scotland’s waves,
Scotland’s tides, Scotland’s solar and Scotland’s hydrogen.
Westminster lies in chaos. It is Scotland’s opportunity on 19
October 2023. Let us put the power in our own hands.
7.19pm
(Edinburgh West) (LD)
This is a strange evening indeed to be discussing the motion
before us, which is in the name of the now former Chancellor.
The Liberal Democrats first called for a windfall tax back in
October last year. If a windfall tax had been brought in then, £3
billion more would already have been raised for the Exchequer.
That is £3 billion that could have been used to offset the
hardship faced by families and pensioners up and down the country
who are struggling to cope with the cost of living crisis.
There are many more things that need to be taken into account,
and I hope that the new Chancellor, whoever he or she may be,
listens to the people of this country who have been taken for
granted for far too long. However, I must admit that I find it
strange to hear the SNP talking about the chaos created by
Westminster when those of us who live in Scotland know about the
chaos that is being created there—in the NHS, with its longest
waiting times; in our education system, which is failing; and
with record drug deaths.
Briefly—because this is an important night—I remind the
Government that there was something they could have done earlier
for the people of this country to alleviate the hardship of the
cost of living crisis. There is more that they can still do: they
can cut VAT. I hope that between now and Monday they might change
the windfall tax to help it raise more money, and they might
reconsider the money that will go into fossil fuels rather than
green technologies.
7.21pm
(Brighton, Pavilion)
(Green)
The Government are introducing this Bill in response to the
extraordinary profits being made by the oil and gas
sector—profits that are not earned but are a consequence of high
global gas prices, fuelled by Russia’s illegal invasion of
Ukraine. As families across the country are struggling to make
ends meet, faced with rising energy bills and a cost of living
scandal, energy companies operating in the UK are predicted to
make an eye-watering £11.6 billion of unexpected windfall profits
this year from oil and gas extracted from the North sea. Not only
is it right that those windfall profits are taxed and
redistributed to provide vital support to households, some 6.5
million of which are now living in fuel poverty, but, frankly, it
would be morally reprehensible to do anything else.
I therefore welcome the fact that the Government are finally
introducing a windfall tax—or an “energy profits levy”, as
Ministers prefer to call it. That is something that I, too,
called for a very long time ago. However, I am extremely
concerned that it is being rushed through, with the consultation
open for just five working days and the Bill receiving only one
day of full scrutiny in this House. That is patently insufficient
time to consider legislation of this complexity and
importance.
We must consider first whether the tax is set at a level that
constitutes an adequate response to the ongoing energy crisis. In
the sixth richest country in the world, April saw more than 2
million adults not eat for a whole day because they could not
afford or access food. The energy levy is one of the tools we
have to tackle this social scandal. We have a deep responsibility
to use it to full effect and to ensure that this is the beginning
of the end for such grotesque levels of poverty and
inequality.
Secondly, we must consider the impact of the proposed investment
allowance on not just domestic but global emissions. I know that
the Treasury does not even recognise the idea of subsidies in the
fossil fuel sector, but that does not change the reality. Make no
mistake: this is a subsidy. It is reckless, and its climate
impacts make a mockery of the Government’s claim to global
climate leadership.
I understand the Government’s desire to give certainty to
companies and bring forward this tax with urgency, but the draft
explanatory note makes it clear that the levy
“will have effect for profits arising on or after 26 May
2022.”
In other words, it is already backdated. That means that allowing
more time for proper consultation and scrutiny would not
materially affect the outcomes of imposing the levy.
I support going further than the Government intend to by imposing
a permanent tax on companies, to be levied at a rate of at least
30%, bringing the total level of tax on oil and gas company
profit to 70%. That 30% increase is a small one on the
Government’s proposed 25% levy, yet it would bring the UK in line
with the global average, joining countries such as Angola and
Trinidad. It has been estimated that a tax of that level would
generate an additional £13.4 billion for the Exchequer. I made
this point in my submission to the Government’s consultation, and
I very much hope that Ministers will judge that it warrants
serious consideration and will revise their Bill accordingly
before it is presented to the House next week.
On the permanency of the tax, I know that Ministers will point to
the fact that this Bill is intended to address the windfall
profits of oil and gas companies, and that there will come a time
again when gas prices are lower and profits are not so high. But
as the Treasury team know, the UK currently has the lowest tax
take in the world from an offshore oil and gas regime. That is
not a badge of honour; it is a badge of shame. In Norway, the
Government get $22 per barrel of oil in tax, whereas here in the
UK we are talking about just $2. So we should use this
opportunity to bring the UK in line with the permanent tax rate
of other countries, regardless of the scale of profits
One other change is crucial: preventing this Bill from including
the 80% so-called “investment allowance”. That outrageous
proposal would, according to the Government’s own factsheet, mean
that for every £1 that businesses invest in North sea oil and gas
they will
“overall get a 91p tax saving”.
First, let us consider the fact that this relief will come at a
huge cost to the taxpayer. Analysis by the New Economics
Foundation showed that the investment allowance would cost £1.9
billion a year, because any subsidised oil and gas projects will
not start to return a profit until after 2025, the date of the
sunset clause laid out in the draft Bill. The E3G think tank
estimates that lost revenue from the investment allowance over
the next three years could have insulated 2 million homes over
the same period, saving households £342 a year, on average. I
struggle to believe that anyone thinks that handing money back to
oil and gas companies is better than kick-starting the
street-by-street nationwide home insultation programme that so
many of us have been speaking about at such length this
evening.
Secondly, this allowance dangerously undermines our climate
targets by actively encouraging new fossil fuel projects. Indeed,
up to 39 fossil fuel projects are eligible for this
“super-deduction” and could be developed in the next three years.
Together, those could emit as much as 899 million tonnes of
greenhouse gases, which is more than double the UK’s estimated
net emissions in 2020. The International Energy Agency and the
Intergovernmental Panel on Climate Change are clear that new
fossil fuel developments are simply not compatible with limiting
global temperatures to 1.5°. The most recent IPCC report in April
was unequivocal that
“further installation of unabated fossil fuel infrastructure will
‘lock in’ GHG emissions and put 1.5°C out of reach”.
It could not be clearer. Alignment with 1.5° is not just some
kind of “nice to have” benefit; it is literally critical to
avoiding climate catastrophe.
Thirdly, this investment allowance will not help to address
domestic energy security, because, as the Treasury team know, 70%
of the remaining reserves in the North Sea are oil and are not
the kind suitable for use in UK refineries, meaning that we
currently export about 80% of it. I therefore urge the Government
to reconsider this aspect of the proposal, which is not just bad
for the public purse, but potentially disastrous for our planet
and will not deliver the benefits that the Government may
claim.
To conclude, at the World Economic Forum in Davos, Fatih Birol,
the IEA’s executive director, was clear that decision makers
should not use
“the current situation as an excuse”
to invest in projects that are incompatible with net zero. I very
much hope that the new Chancellor, whoever they may be, will heed
that warning and reform this Bill before it comes to Parliament
next week.
7.28pm
It is a pleasure to respond to many of the interesting points
that have been made, and I wish to touch on a few of them. The
hon. Member for Ealing North () suggested that this was his
proposal for a windfall tax that we have adopted, but he will
know that this is not Labour’s proposal, because it is
significantly different. Not only does it bring in further
revenues, but it introduces an investment incentive, to ensure
that we get more from our oil and gas sectors.
The hon. Member also mentioned the cost of living. He will know
that we are spending £37 billion on supporting people when they
most need it, but the most important point is about fiscal
responsibility. We on this side of the House believe in fiscal
responsibility. That is why, unlike Labour, we have not made £100
billion-worth of unfunded spending proposals, which no amount of
taxation would fund.
I understand the points that my hon. Friend the Member for Poole
( ) makes. No Conservative
Government is keen on additional taxes, but, as he will know,
this is a temporary, short-term, focused additional tax that has
a sunset clause and might well be brought to an end—there are
provisions to allow that—when revenues return to normal.
I remind the House that the hon. Member for Glasgow Central
() called for more windfall
taxes on other industries. That is obviously something that we
would oppose, but the interesting point she made was about what
she said was the mismanagement of resources. I remind the House
of the mismanagement of the SNP Government in Scotland, whose
health, education and justice budgets are growing more slowly in
real terms than UK spending, and that the reason for that is the
50% increase in their welfare budget.
The hon. Member for Edinburgh West () suggested that her
proposal would have delivered £3 billion more if this tax had
been introduced earlier, but she forgets that the Lib Dem
proposal was significantly less than what we have proposed in
terms of revenues. The Lib Dems were proposing a 10% increase in
the supplementary charge. She will know that our proposal is for
a 25% increase.
Finally, I understand the perspective of the hon. Member for
Brighton, Pavilion (), given where she comes from
on these issues, but I am grateful that she has indicated that
she welcomes the levy, although of course she would like it to be
broader. With those comments, and with the leave of the House, I
commend the Bill to the House.
Question put and agreed to.
Resolved,
That provision may be made for, and in connection with, imposing
a charge on ring fence profits of companies (within the meaning
of Part 8 of the Corporation Tax Act 2010).
Ordered, That a Bill be brought in on the foregoing
Resolution;
That the Chairman of Ways and Means, the Prime Minister,
Secretary , Secretary , , , , , and introduce the Bill.
Energy (Oil and Gas) Profits Bill
accordingly presented a Bill to
make provision for, and in connection with, imposing a charge on
ring fence profits of companies.
Bill read the First time; to be read a Second time tomorrow, and
to be printed (Bill 135) with explanatory notes (Bill 135-EN).
Energy (Oil and Gas) Profits
Levy Bill
Explanatory Notes
