Windfall tax ruled out by UK Government as oil companies bank soaring profits

Boris Johnson has ruled out imposing a windfall tax on the bumper profits made by oil companies to tackle the cost of living crisis.

The Prime Minister’s spokesman dismissed fresh calls for a one-off levy after BP announced it had made a £9.5 billion profit in 2021.

Labor and the Lib Dems, as well as some Conservative MPs, back a one-off windfall tax on the profits made by the rise in wholesale energy prices to help offset the steeply rising domestic bills expected this year.

Bernard Looney, the chief executive of BP, has described the energy giant as a “cash machine” after soaring oil and gas prices boosted profits.

But Downing Street again ruled out the move and said it would “deter investment in the North Sea”.

As well as renewing calls for a swoop on the huge profits Labor also highlighted how the SNP refused to back the windfall tax on the North Sea giants.

Shadow Scotland Secretary Ian Murray MP said: “The boss of BP has described the energy price crisis as a cash machine for his company – unfortunately its families across the country providing that cash.”

“With multi billion pound profits for these international corporations, it is utterly shameful that the SNP has sided with the Tories in blocking Labour’s windfall tax on oil and gas companies.”

“It is no surprise the Tories have sided with big business, but it’s incredibly disappointing the SNP has decided to do the same.

“Labour’s plan to tackle energy bills would save £200 for most households in Scotland and £600 for the 815,000 households hardest hit by the cost of living crisis.”

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Lib Dem leader Ed Davey said: “A windfall tax is the best way to get money to the people who need it quickly, but also to make sure there is some sense of trust and proportionality in the system.”

Chancellor Rishi Sunak announced a £2 billion package of support for consumers this year, which will include a repayable £200 discount and a £150 rebate on council tax bills in England, with the funding also producing £290 million in Barnett consequentials for the Scottish Government.

Nicola Sturgeon assured MSPs the government would spend “every single penny” on the cost of living crisis and Social Justice Secretary, Shona Robison, said yesterday plans would be announced “in short order”.

Giving evidence before Holyrood’s Health, Social Care and Sport Committee, Robison admitted the Scottish Government would have to focus its interventions.

She said: “Will we be able to mitigate every part of the cost of living impact? I don’t think we can on a fixed budget. But what we can do is make sure our support is targeted at those who are most in need.”

Of the £290 million in extra funding £120 million has already been committed by Finance Secretary Kate Forbes for cash-starved Scottish local authorities.

When asked what discussions were ongoing within Government on how to spend the consequentials sent from Westminster, Robison said “discussions are still ongoing”.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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