Oil and Gas Producers: Windfall Tax

Ian Byrne Excerpts

Tuesday 1st February 2022 Commons Chamber

[Ian Byrne (Liverpool, West Derby) (Lab)]

The impact of the cost of living crisis on my constituents and people across the country is truly harrowing and a shameful injustice inflicted by the Government. An article in the Liverpool Echo this week talked about the “perfect storm” that people in our city are facing of soaring energy costs and record inflation—all against a backdrop of a decade of Conservative austerity that has cut our support services to the bone.

According to research from Feeding Liverpool, about 14% of households in Liverpool experience fuel poverty, which is significantly higher than the England average. Some 32% of adults in Liverpool are food insecure, where food is a source of worry, frustration and stress—that is more than 150,000 people in Liverpool alone. That was all before inflation started to spiral. A humanitarian crisis demands permanent solutions, not tinkering with a broken system.

An example of that broken system was highlighted by my good friend Tony Caveney, a cabbie from Liverpool, who said in a message last week:

“An old woman in the taxi this morning said she had to get out the house to get warm.”

I did not know whether to laugh or cry, but we should all be raging with anger, because it is the political choices of the Government that have enabled the scandalous situation that many people in our communities find themselves in.

This crisis will affect generations to come. Before Christmas, I spoke in the House about what Professor Ian Sinha, a paediatrician at the fantastic Alder Hey Children’s Hospital in my constituency, said to me:

“A big issue at the moment is the interplay between food and fuel poverty—eat or heat—in essence babies and infants in the coldest houses will spend their calories trying not to get hypothermia rather than utilising the energy to grow their body systems and lay the foundations for a healthy life course”.

That is shameful. Fuel poverty is a political choice and hunger is a political choice. They are all choices made by the Government and inflicted by the Chancellor in particular. The £20-a-week cut to universal credit and his current failure to intervene in the spiralling costs of fuel bills are political choices.

Many households have already seen a significant energy price rise and the household energy price cap is expected to rise by up to 50% in April. Fuel poverty campaigners estimate that that increase will drive 2 million people into fuel poverty and impact older households already seeing the suspension of the triple lock on pensions. By voting for the motion today, the Government could introduce a windfall tax on the profits of North sea oil and gas producers, which is a much-needed first step towards funding a national package of support for households.

The crisis has been long in the making and we need the Government to bring about systemic change. Trade unions and campaigners have long argued that the privatisation of the energy sector has resulted in high profits while the public foot the bill and costs rise. People who cannot afford the extortionate bills pay with damage to their health, livelihood and wellbeing.

Workers in the industry are being made to pay through attacks on their terms and conditions by industry bosses, which have pushed many workers into fuel and food poverty. We saw that when British Gas used fire and rehire tactics against its workers at the height of lockdown, and we see it today with OVO, which is threatening to make between 1,700 and 2,000 staff redundant despite, according to Unite the Union’s estimate, its top directors taking £4.6 million out of the company in salaries and benefits in the last five years.

The system is broken. To transform this shocking situation, we need action from the Government on public ownership, decarbonisation in the energy sector, and the urgent retrofitting and insulating of houses to bring down energy costs. The practice of bailing out and subsidising private energy suppliers without the benefits of public ownership and control is wasteful and unjust. Research by Greenwich University’s public services international research unit showed that public ownership of water, energy grids and the Royal Mail would save UK households £7.8 billion a year and pay for itself within seven years.

The technology and solutions exist. What is lacking is the political will from a Government whose mission is always to prioritise private profits over the wellbeing of the people who they are supposed to represent. We do not have to look far. Across the border in Wales, the Welsh Government are going to set up a publicly owned energy provider in the near future, so another way is possible.

I urge the Government to back the motion, bring some much-needed relief quickly to worried communities across the country and have the bravery to tackle the systemic failings that are driving this humanitarian crisis to alleviate the suffering of millions. We cannot let this plight continue when it can be eradicated by the correct political choices.