Energy Profits Levy
Debate between Baroness Penn and Lord Woodley(1 year, 6 months ago)
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Baroness Penn (Con)
I welcome the noble Lord to the Front Bench. He referred to figures that are the global profits of companies. As I have said to his noble friend, the UK applies its windfall tax to UK profits, and I think that is the Labour proposal also. Abolishing the investment allowance would be counter-productive. As I have said, the UK is still reliant on gas for its energy supply. Reducing incentives to invest would lead to investors pulling out of the UK, damaging the economy, causing job losses and leading to lower future tax revenue—tax revenue that we have used to put in place unprecedented cost of living support to families, which is still going out to households at the moment, so that those who are worried about their bills who are on low incomes and means-tested benefits can look forward to more support coming from the Government over the next year.
Lord Woodley (Lab)
My Lords, while I am delighted that the Government took Labour’s advice to introduce the windfall tax that has been mentioned, there is no doubt that what is happening now, with the profiteering coming from these energy giants, is insufficient and is just not working. In fact, I would go as far as to say that it is almost peanuts when you look at the profits that were announced last week. So when will the Government fight back against “greedflation” and bring in a windfall tax with real teeth in it—something similar to what is happening across the rest of Europe at the moment?
Baroness Penn (Con)
I do not know whether referring to over £50 billion of tax take as “peanuts” reflects the broader Labour Party’s attitude towards public finances, but the Government consider that the measures we have put in place are working well. We need to balance the rightful approach of taxing the unexpected profits of these companies while ensuring that we have investment incentives in place that protect UK jobs and UK energy security.
Energy Profits Levy
Debate between Baroness Penn and Lord Woodley(1 year, 9 months ago)
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Baroness Penn (Con)
The Government regularly engage with all sectors on their net-zero targets. When it comes to the oil and gas sectors specifically, the changes that we made at the Autumn Statement increased the level of tax relief for decarbonisation of the production of oil and gas better to incentivise companies to take more action in that area.
Lord Woodley (Lab)
My Lords, my union, Unite, has shown that corporate profiteering is responsible for massively fuelling inflation, unlike public sector pay rises, which in my opinion are not inflationary. Powerful corporations such as Shell are creaming in the profits, and everyone can see that it has now become obscene, driving prices ever higher and causing millions to suffer and go hungry. It is not acceptable. Why are the Government so unwilling to rein in corporate profiteering and instead are choosing to punish poorly paid public sector workers?
Baroness Penn (Con)
I just point out to the noble Lord that we have introduced the energy profits levy. That charges tax at a headline rate of 75% on those companies, and we expect to raise up to £80 billion in taxes from the North Sea overall in coming years.
Economic Downturn
Debate between Baroness Penn and Lord Woodley
Baroness Penn (Con)
My Lords, there are several prongs to that, one of which we discussed during the passage of the skills Bill, which the Parliament has just enacted, including increases in investment in skills and working with employers to ensure that the qualifications meet their needs. As part of that work, the Department for Education is also working with employers to look forward to what future skills the country will need.
Lord Woodley (Lab)
My Lords, we all agree that soaring inflation is a great threat to the economy and is, without a shadow of doubt, fuelling the cost of living crisis, but new research from my union, Unite, shows that it is being driven by corporate profiteering and some greed, with profit margins of the FTSE 350 firms now 73% higher than pre-pandemic. What is stopping the Government bringing in a windfall tax on all companies found to be profiteering or price gouging, not just the oil and gas companies, as currently proposed?
Baroness Penn (Con)
The Bank of England’s independent Monetary Policy Committee said in its recent report that the vast majority of the increase in inflation over the past year reflects the impact of sharp increases in global energy and tradeable goods prices. On increases in energy prices, we have introduced the energy profits levy, and more than the amount that will be raised through that levy is being returned to households through our cost of living support.
National Insurance Contributions
Debate between Baroness Penn and Lord Woodley
Baroness Penn (Con)
My Lords, we have strayed more on to a windfall tax than I expected, but I say to my noble friend that he makes a good point. The issue of energy security is at the top of people’s minds at the moment. The Government see gas, for example, as part of our transition towards net zero. We want to allow people to invest in our North Sea oil and gas fields as part of that, so a windfall tax could also have a negative impact on that.
Lord Woodley (Lab)
My Lords, there is no doubt at all that at the lowest level this tax will be a detrimental pay cut for most workers in our country—there is no doubt at all about that. It will be felt most harshly by them, while they are at the same time caught up in the cost of living crisis that we have. They are being squeezed dry, as we know, by soaring inflation—and that is before next month’s massive hike. Can the Minister possibly justify this attack on the lowest-paid workers in our country and, if so, how can she?
Baroness Penn (Con)
My Lords, the Government have been very clear in their justification for the health and social care levy. The Government are committed to the responsible management of the public finances, which is why we have had to take tough but responsible decisions to increase taxes in order to fund a significant increase in permanent spending on the NHS and social care. On the cost of living challenge, that is why, this year and next, the Government will provide £20 billion of support to help those people who are struggling to meet their household bills.