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Why the government opposes an unexpected tax on oil and gas profits

Calls for a UK windfall tax on energy giants have been raised after BP reported that its profits more than doubled in the first three months of this year.

The company posted underlying profit of $6.2 billion (£4.9 billion), compared with $2.6 billion in the same period last year when oil and gas prices soared. analysts told The Sunday Times They also expect Shell to report record net income of $8.5 billion on Thursday, up from $3.2 billion.

Labor has called for a one-off tax on energy companies to fund policies that will Cost of Living Crisis for families in the UK.

“Obscene” Winnings

Ed Miliband, Secretary of State for Shadow Climate Change and Net Zero, said Boris Johnson’s refusal to impose a windfall tax to bring down energy prices was “deeply wrong, unfair and tells you everything you need to know about it, on whose side.” this government is standing,” he reported daily mirror.

Frances O’Grady, the TUC general secretary, said that “at a time when households across the UK are being pounded by soaring bills and prices, these gains are obscene”, adding that “the government needs to stop making excuses to find and collect an unexpected tax”.

There are precedents for such measures. For example, the Italian government approved a €11.8 billion energy support package.

investment deterrent

The government argues that such a levy would discourage investment in the North Sea. said Economics Minister Kwasi Kwarteng Sky news on Sunday that he had “never been a proponent of windfall taxes” because they “deter investment.”

Johnson continued the same argument Good morning Britain yesterday morning. The Prime Minister said an unexpected tax on energy giants would “prevent them from making the investments we want to see that will ultimately keep energy prices lower for everyone”.

However, BP’s boss said plans to invest in the UK would not be affected if the government increased its taxes. The company said it aims to invest up to £18 billion in Britain’s energy system by the end of 2030, the reported financial times.

Asked by The times What investments BP would cancel if there were a windfall tax, Bernard Looney, BP’s chief executive, said: “There isn’t one we wouldn’t do.”

He added that BP is making the investments because “we support the UK” and “we believe the guidelines for these investments are in place here”.

He said BP’s higher profits gave it “an opportunity to invest” and that it plans to inject between 15% and 20% of its capital expenditures in the UK, versus between 10% and 15% historically.

Miliband picked up on these remarks, tweet that “the whole government case against the Windfall Tax has now been exposed as a fraud by none other than the head of BP”.

The shadow minister added that the government had “run out of excuses”.

https://www.theweek.co.uk/news/uk-news/956628/why-the-government-opposes-a-windfall-tax-on-oil-and-gas-profits Why the government opposes an unexpected tax on oil and gas profits

Fry Electronics Team

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