Boris bats away calls for windfall tax on energy firms

Boris bats away calls for windfall tax on energy firms

05/04/2022

Boris bats away calls for windfall tax on energy firms to help fund cost-of-living bailout – despite BP saying a levy would NOT hit investment

Boris Johnson today batted away calls for a windfall tax on energy firms to help fund a fresh cost-of-living bailout.

The PM said encouraging companies to invest more in the UK was a better option than ‘clobbering’ them.

The comments came despite BP unveiling huge profits yesterday and chief executive Bernard Looney admitting that a levy would not change any of its investment plans.

Chancellor Rishi Sunak set hares running on the prospect of a windfall tax recently when he insisted the idea – strongly backed by Labour – was not ‘off the table’.  

But asked about the company’s investment commitments during a local election campaign visit to Eastleigh, Mr Johnson said: ‘They don’t want a windfall tax and there’s a good reason for that, and that is because it would stop investment in new technology and in new green power that we need.

‘The problem we have got is that … this is an incredible country, incredible economy, fifth biggest in the world, but we’re mainlining energy from France. It’s insane.

‘We haven’t invested enough in our own domestic energy and we need these big energy companies to step up to the plate and put their money into sustainable solutions, more green energy and to help keep costs down.

‘That is a much, much better solution than clobbering them and dissuading them, stopping them from making that investment. We need those companies to be investing now in the power supply that is going to keep costs down.’

Boris Johnson (pictured at Southampton airport today) said encouraging energy companies to invest more in the UK was a better option than ‘clobbering’ them

The comments came despite BP unveiling huge profits yesterday and chief executive Bernard Looney admitting that a levy would not change any of its investment plans

BP pledged to spend £18billion in Britain over the next eight years yesterday as it looked to counter calls for a one-off windfall tax.

The company posted a record £5billion in underlying profit for the first three months this year, far ahead of analyst expectations of £3.6billion, and its best quarterly performance for 14 years.

The firm also announced it would hand £2billion back to investors in the form of a new share buyback – a significant boost to the nation’s pension funds.

The spending plans include money for North Sea oil and gas as well investments in wind power and electric car charging points.

Mr Looney said: ‘We’re backing Britain. It’s been our home for over 110 years, and we’ve been investing in North Sea oil and gas for more than 50 years.’

He added: ‘Our plans go beyond just infrastructure – they see us supporting the economy and skills and jobs in the communities where we operate. We are all in.’

Asked by The Times what investments might be cancelled if there was a windfall tax, Mr Looney said: ‘There are none that we wouldn’t do.’ 

BP also said it expected to pay £1billion in taxes for its 2022 North Sea profits, on top of around £250million that it has paid annually in other taxes in the UK in recent years.

Keir Starmer has insisted BP’s bumper profits ‘reinforce the case’ for a levy. 

BP’s numbers were boosted by high oil and gas prices over the period, with Brent Crude rising from $78 per barrel at the start of January to $107 per barrel by the end of March.

As a result of a surge in the prices, the company’s oil and gas trading division was a stand-out performer, generating a whopping £1.3billion profit over the quarter.

While BP posted its best underlying profit since 2008, once the £20billion cost of abandoning its 19.75 per cent stake in Russian oil producer Rosneft following the invasion of Ukraine was taken into account, it made a quarterly loss of £16.3billion, the biggest in its history. 

Asked what investments might be cancelled if there was a windfall tax, Mr Looney said: ‘There are none that we wouldn’t do.’

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