Energy Producer Profit Trends 2022-12-20
2022-12-20
TAGS
Response quality
Questions & Answers
Q1
Partial Answer
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Context
The question follows a period of unprecedented increase in gas prices due to Russia's invasion of Ukraine, leading to an eightfold rise in energy prices. Energy generators have seen significant profit increases.
What assessment has the government made of the implications for their policies given trends in the level of energy producer profits over the last 12 months? The questioner notes that Shell and BP announced substantial quarterly profits, with Shell planning no windfall tax payment this year and BP paying £678 million. She asks if a proper windfall tax could support offshore customers like hers.
The government is introducing a temporary 45% tax on extraordinary returns made by some UK electricity generators from January. This levy will contribute £40 billion to the Exchequer, enabling support of more than £100 billion for businesses and households this winter.
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Assessment & feedback
The questioner asked about a proper windfall tax capturing profits; the answer did not address Shell's specific non-payment or BP's low payment.
Response accuracy
Q2
Partial Answer
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Context
Shell and BP have announced significant profits following an unprecedented rise in gas prices due to the Russian invasion of Ukraine. Shell plans no windfall tax payment this year, while BP will pay £678 million.
Given that Shell has announced worldwide profits of £8.2 billion and £9 billion for recent quarters, and BP more than doubled its profits, does the Minister agree that if a proper windfall tax were implemented capturing these profits, it could support offshore customers such as those in North East Fife?
The energy profits levy will contribute £40 billion to the Exchequer, playing a key part in enabling support of more than £100 billion this winter and next year. This will help reduce inflation overall.
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Assessment & feedback
Did not address whether Shell's non-payment or BP's low payment would be captured by the proposed levy.
Response accuracy
Q3
Partial Answer
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Context
The government's failure to implement a proper windfall tax could have raised an additional £16.8 billion, potentially supporting families and businesses during the winter.
If Labour's proposed windfall tax had been implemented, it would raise an additional £16.8 billion. Why have the Government chosen not to put this potential revenue towards supporting families and businesses in the coming tough winter?
We do not accept that figure entirely. The energy profits levy includes an allowance for investment and is applied fairly, but long-term answers lie in energy security and transition to net zero.
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Assessment & feedback
Did not specify why the government chose not to utilise this potential revenue as requested.
Response accuracy