Energy Profits Levy

Lord Woodley Excerpts

Tuesday 9th May 2023 Lords Chamber

[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.