Labour calls for government to scrap handouts to oil and gas producers as cost of living crisis escalates

The Labour Party has called on the government to use Thursday’s meeting with oil and gas giants in Downing Street to close a major tax loophole in the windfall tax.

The government's energy profits levy factsheet shows that the new investment allowances within the levy mean that for every £1 invested, 91.25p will go back to firms in additional tax relief. 

This is despite oil and gas producers announcing bumper profits. The CEO of BP has previously described current high prices as a “cash machine” for the producer, while its CFO said they have “more money than they know what to do with” if prices stayed high. 

The Labour party has also today revealed the cost of government delay over rising energy bills. Labour called for the windfall tax 137 days earlier than the government announced. By delaying, the government lost out on around £1.9 billion that could have been put towards public services.

Rachel Reeves MP, Labour’s Shadow Chancellor, said: 

“The Tories are handing oil and gas giants billions in tax breaks, just for them to pass it on to shareholders. The government should be ashamed this loophole existed in the first place. 

“This isn't right at a time when people are worried sick about how they'll pay their bills.”