Oil and Gas Producers: Windfall Tax

Nadia Whittome Excerpts

Tuesday 1st February 2022 Commons Chamber

[Nadia Whittome (Nottingham East) (Lab)]

It is clear to anyone living in this country that we are experiencing a cost of living crisis. As food and energy prices are spiking, my constituents tell me that they are anxious and outraged at ever larger bills. The Resolution Foundation estimates that in April, when changes to the energy price cap are introduced, those bills will soar by 50%. That will lead to more than one in four households spending at least 10% of their income on energy. With housing costs already taking up a significant proportion of household spending and food bills increasing, more and more people will be forced to choose between heating and eating while this Government dawdle.

I strongly support Labour’s proposal to introduce a windfall tax on oil and gas. While my constituents worry about their bills, North sea oil companies have been reaping criminal profits. The think-tank Common Wealth reports that Shell and BP alone have paid £147 billion to their shareholders since 2010, which is more than seven times the £20 billion that it would take to keep household energy bills at their current level. Those profits have only become more obscene as the current energy crisis has worsened. At the end of last year Bernard Looney, the chief executive of BP, described the crisis as a “cash machine” for his company. That cash is coming from my constituents’ pockets, and those of people who are struggling to pay their bills. There is simply no argument when it comes to whether these companies can afford a windfall tax. It is my constituents who cannot afford the Government’s inaction. This refusal to act, however, comes as no surprise when the Conservative party has taken almost £1.5 million from the energy industry under this Prime Minister.

In the short term, the proposed tax will lessen the burden on families; in the longer term, we desperately need to reduce our reliance on gas, seriously invest in renewables, and create a national programme to insulate homes. We must also acknowledge that the privatisation of our energy system has failed. Competition has not driven down bills; in fact, gas bills have risen by 50% since 1996, and private companies have failed to switch to the sustainable energy sources that we need in order to tackle the climate crisis. Public ownership of our energy system could have helped us to withstand the current turbulence in the energy market, and the public support it: in 2019, 52% of people polled were in favour of it.

I therefore urge the Government to implement a windfall tax now, to bring energy into public ownership, and to invest in the transformative changes that will protect struggling families and our planet now and for years to come.