Energy Profits Levy

Baroness Jones of Moulsecoomb Excerpts

Tuesday 7th February 2023 Lords Chamber

Asked by

[Baroness Jones of Moulsecoomb]

To ask His Majesty’s Government what plans they have to review the impact of their energy profits levy, given the profits announced by Shell on 2 February.

[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

The energy profits levy was introduced in May 2022 to respond to very high prices that mean that oil and gas companies are benefiting from exceptional profits. In the Autumn Statement, the Government confirmed that the rate of the levy would rise by 10 percentage points to 35%. This brings the combined headline rate for tax for the sector to 75%. The OBR forecasts that the levy alone could raise more than £40 billion over the next five years.

[Baroness Jones of Moulsecoomb (GP)]

I thank the Minister for her Answer, but it is obvious to us all that gas and oil companies are making obscene profits just when the poor and the old are frightened of turning on their heating because they cannot afford it. I would like the Government to promise to increase the windfall tax on companies such as Shell, BP and others, close the tax loopholes, use the money to speed up insulating Britain—which is a good campaign slogan—and stop their planned hike in energy prices for companies in April. Is that something they will do?

[Baroness Penn (Con)]

I absolutely agree with the noble Baroness on the importance of protecting consumers, including vulnerable consumers. We have the energy price guarantee and other support for them, for example, through increasing rates of universal credit. I completely agree with her on the need to focus on energy efficiency, but I disagree on her interpretation of the current regime as having “loopholes”. They are about encouraging investment in the sector, which is incredibly important for our energy security and for keeping bills down in the longer term.