Oil and Gas Producers: Windfall Tax

Dan Carden Excerpts

Tuesday 1st February 2022 Commons Chamber

[Dan Carden (Liverpool, Walton) (Lab)]

We associate energy poverty with the poorest people and the most deprived communities. Liverpool, Walton is home to many people struggling to afford everyday essentials and wishing their streets and neighbourhoods might see some of the prosperity this Government promise in their empty words.

For the young mum struggling with the top-up payment card in the local shop, trying to keep the lights on and the heating running in her home, that poverty is humiliating, yet the experience of living hand to mouth for energy, and that humiliation, is now spreading across the UK, because the energy market is broken. It is not even really a market but a racket of monopoly suppliers, capped prices and enormous excess profits. Rising energy bills are not an act of God. They are the result of the anarchy of global energy supply and the total mismanagement of Britain’s energy industry by a Tory party that seems to put any interest above the interests of the British people. I support a windfall tax on oil and gas producers to lower bills this year. I listen to my hon. Friends asking Government for an extra £1 billion here or an extra £1 billion there. Now more than ever, the evidence before us—an industry pleading with Government to lift its cap, families pleading with Government to make the cap tighter, and oil and gas producers boasting that their companies are like cash machines—demands a new settlement.

I stood for election pledging to take the whole energy supply industry into public ownership, to set up a national energy agency to own and manage the grid and to put the big six energy suppliers, the only ones likely to survive this crisis, under public control. I believe it is the job of Government to fix the energy crisis, not to prop up the failing energy market.

To manage security of supply when gas is being used as a geopolitical tool is bigger than an economic issue. To decarbonise energy is also bigger than the forces of supply and demand, and to stop energy bills wiping out the income and savings of families up and down the country is a matter of social justice. The market provides no solutions to those problems. The only way to resolve those issues is to have a Government with the will to act and to put the interests of the people we in this House are supposed to represent above the interests of big energy companies and their shareholders. Sadly, that seems a long way off.

--- Later in debate ---

[The Minister for Energy, Clean Growth and Climate Change (Greg Hands)]

This has been a useful debate. May I start by paying tribute to those workers who are working hard out there, helping the recovery from Storms Malik and Corrie? As we know, the storms hit Scotland and north-east England very hard. Some 214,000 customers have had power restored, but approximately 10,900, particularly in the north-east of Scotland, were still without power as of 10 o’clock this morning. I spoke to Scottish and Southern Electricity Networks last night and have updated MPs.

As we have heard today, the Government have a wide range of support measures in place to help the most vulnerable households. We have both rebates and energy efficiency measures to help households reduce their energy consumption. To recap, the warm home discount scheme provides support with energy bills through rebates, helping households to stay warm and healthy in winter. The scheme currently provides more than 2 million low-income and vulnerable households with a £140 rebate off their winter energy bills. The Government have already consulted on proposals that would expand the scheme from approximately £350 million in value to £475 million per annum in 2020 prices, which will help it reach 3 million households from winter 2022-23 onwards.

We are of course considering a range of options to address the current challenges further, but we must also be mindful of the wider consequences of any actions that we take. The Government already place additional taxes on the extraction of oil and gas, with companies producing oil and gas from the UK continental shelf subject to headline tax rates on their profits that are currently more that double those paid by other businesses.

[Dan Carden]

While the Minister is on his feet, will he respond to the comment from the head of BP that his company was like a cash machine?

[Greg Hands]

We have ourselves raised more than £375 billion-worth of production taxes. North sea oil and gas have been a big success story for this country, and also for our Exchequer. As a former Treasury Minister, I can repeat that of course all taxes are kept under review by the Treasury, and any changes are considered and announced by the Chancellor.