Ahead of the energy price cap rising on Friday 26 August, Labour
has today called on the Conservatives to back an expansion of the
windfall tax on oil and gas companies that could help fund an
immediate freeze in energy bills this winter.
As British families struggle to pay their energy bills and face
the prospect of annual bills at a record £3,500 in October
(link), oil and gas producers
in the north sea have directly benefitted, making unexpected and
record profits at the expense of the British people.
Since Labour first called for the windfall tax in January 2022,
oil and gas producers have raked in over £10 billion of profits
in January-June 2022. (See footnote). Government data predicted
in March the north sea oil giants could take in as much as £19.5
billion across the whole of 2022 (link), which is £13.6
billion in excess of what they made over the preceding decade
when they averaged £5.9 billion a year.(Link).
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. (Link). Energy giants such as
Shell and BP posted record profits in the first half of 2022.
(Link)
To help fund an immediate freeze on energy bills for families
this winter, Labour has called for a significant strengthening of
the windfall tax, in a move that could raise over £8bn to help
fund the energy price freeze. This includes removing the bumper
tax-breaks for oil and gas companies in Rishi Sunak’s Energy
Profits Levy, which is on track to give billions of pounds back
to the very oil and gas producers making bumper profits.
Both Conservative candidates are now under pressure to clarify
their positions on the windfall tax. spent months opposing the
windfall tax as Chancellor, and when he was finally forced do so,
he introduced the multi-billion loophole. Meanwhile, has recently outlined her opposition to the windfall
tax, citing it as a “Labour idea.” (Link).
With Ofgem less than a day away from announcing the next level
for the energy price cap, time is running out for both the
current Conservative Government and the candidates for Prime
Minister to set out what specific measures they would take to
support British families, as well as how these would be funded.
Labour’s fully-funded plan would prevent the energy price cap
rising through the winter, saving the average households £1,000
this winter, paid for by extra tax on the eye-watering profits of
oil and gas giants.
The emergency package announced by on Monday would reduce energy
demand and lower bills in the longer term by insulating 19
million homes across the country over the next decade through
Labour’s Warm Homes Plan.
, Labour’s Shadow Climate Change and Net Zero
Secretary said:
“We are now less than 24 hours away from the energy price cap
rising yet again, but we have heard no serious proposals from the
Conservative leadership candidates on how to stop this national
emergency.
“We simply cannot allow the British people to suffer a further
increase in energy bills. It is intolerable that the
Conservatives continue to offer no solutions to this crisis, and
oppose Labour’s plans to freeze energy bills, paid for by
expanding the windfall tax on oil and gas producers making record
profits.
“Liz Truss and obviously care more about the
balance sheets of big oil and gas businesses than they do about
keeping money in working people’s pockets.
“This is a Government that is not on working people’s side. Only
Labour can give Britain the fresh start it needs - with a plan to
tackle the cost of living crisis now and build a more secure
country.”
Notes to
editors:
- Note on Labour’s energy price cap freeze announcement
attached.
- £10bn North sea oil and gas profits January-July 2022 is
based on assumption that:
· The August 2022 Office
National Statistics Public sector receipts found that offshore
corporation tax brought in £4.1bn of revenue.
· These receipts are derived
from Corporation Tax on North Sea Oil and Gas Profits, which is
charged at 40% (30% Ring Fence Corporation Tax and 10%
Supplementary Charge).
· This implies that North Sea
oil and gas production profits were over £10bn in January-July
2022.
· https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/datasets/appendixdpublicsectorcurrentreceipts
