Oral Answers to Questions

Wendy Chamberlain Excerpts

Tuesday 20th December 2022 Commons Chamber

[Wendy Chamberlain (North East Fife) (LD)]

2. What assessment he has made of the implications for his policies of trends in the level of energy producer profits in the last 12 months.

[The Exchequer Secretary to the Treasury (James Cartlidge)]

The structure of the electricity market means that the price of electricity is tied to the wholesale gas price. Russia’s invasion of Ukraine triggered an unprecedented increase in gas prices, driving energy prices to eight times their historic levels. As a result, many energy generators’ profits are well above pre-crisis levels. As announced at the autumn statement, the Government are introducing a temporary 45% tax on extraordinary returns made by some UK electricity generators from 1 January.

[Mr Speaker]

I call Wendy Chamberlain, whose birthday it is today. Happy birthday.

[Wendy Chamberlain]

Thank you, Mr Speaker.

Shell announced worldwide profits of £8.2 billion and £9 billion for the three-month period between July and September and the three months to June. BP announced more than double its profits for the same period. They have increased their dividend payments and spent billions buying back their own shares from the market. Shell says that it does not expect to pay any windfall tax at all this year and BP said that it would pay £678 million. Does the Minister agree that, if the Government had implemented a proper windfall tax that captured these things, we could be supporting offshore customers such as my own in North East Fife?

[James Cartlidge]

Obviously, the hon. Lady knows that we do not comment on the commercial decisions of individual companies. What I can confirm is that the specific levy to which she refers—the energy profits levy—will contribute £40 billion to the Exchequer. We must remember that that £40 billion will play a key part in enabling us to afford the support that we are giving to constituents throughout the United Kingdom this winter and next year, which will total, for businesses and households, more than £100 billion, and the Office for Budget Responsibility has already found that that will help to reduce inflation overall.