Tory plot to drop windfall tax in midst of cost-of-living crisis branded obscene

09 June 2023 , 19:55

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Chancellor Jeremy Hunt (Image: PA)

A Tory bid to scrap the windfall tax and hand even bigger profits to energy giants has been blasted as obscene.

An Energy Profits Levy was brought in last year amid uproar about the money raked in by industry giants.

As families struggled to pay their bills, companies like Shell and BP made huge profits as wholesale oil and gas prices rocketed following the war in Ukraine.

The levy – brought in to subsidise consumers – raised the tax on North Sea producers from 40% to 75%.

But yesterday, Chancellor Jeremy Hunt confirmed plans to revert to 40%. The move has been criticised by campaigners.

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Simon Francis, of the End Fuel Poverty Coalition, said: “ Energy bills are predicted to remain high and household debt is still surging. Any talk of reducing or ending the windfall tax while millions still struggle is premature.”

Shell boss Wael Sawan

BP boss Bernard Looney (BP/AFP via Getty Images)

Alice Harrison, of campaign group Global Witness, added: “We have a Government on the side of polluters. This obscene move shows it has learned nothing and is intent on returning to business as usual.”

The Treasury said the tax would only revert to 40% if wholesale prices “consistently return to normal levels for a sustained period”. That is defined as six months when oil averages less than $71.40 a barrel and gas is under 54p a therm. Yesterday’s figures were $75.38 and 64p.

If prices do not drop below the threshold, the levy will remain until March 2028. So far, it has raised £2.8billion for the Government.

Treasury minister Gareth Davies said: “Never again can our energy supplies be at the whim of petrostate despots like Putin. It’s vital we promote investment.”

Shell, led by Wael Sawan, made £7.6billion in the first quarter of this year – £986 a second – and doled out £4.8billion in dividends.

BP, headed by Bernard Looney, netted £4billion in the same period.

Graham Hiscott