Commons Sense

House of Commons · Ministers' Questions

Energy Producer Profit Trends

Tuesday 20 December 2022 · 3 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 3 Not answered 0

Key points

  • The government introduced a temporary 45% tax on extraordinary returns by some UK electricity generators starting January.
  • The energy profits levy is expected to contribute 40 billion to the Exchequer, supporting more than 100 billion in aid for businesses and households this winter and next year.
  • The government's energy profits levy includes an allowance for investment and is applied fairly, aiming at long-term energy security and transition to net zero.

Topics (select to filter)

Questions & Answers

Q1 Wendy Chamberlain Lib Dem North East Fife
Energy
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.

Question

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.

Answer from James Cartlidge

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.

Partly answered

Not addressed: 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.

Was this summary accurate? Tell us

How accurate was this summary? (1 = poor, 5 = spot on)

Get updates like this by email
Q2 Wendy Chamberlain Lib Dem North East Fife
Economy Taxation Energy
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.

Question

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?

Answer from James Cartlidge

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.

Partly answered

Not addressed: Did not address whether Shell's non-payment or BP's low payment would be captured by the proposed levy.

Was this summary accurate? Tell us

How accurate was this summary? (1 = poor, 5 = spot on)

Get updates like this by email
Q3 Abena Oppong-Asare Lab Erith and Thamesmead
Economy Climate Energy
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.

Question

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?

Answer from James Cartlidge

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.

Partly answered

Not addressed: Did not specify why the government chose not to utilise this potential revenue as requested.

Was this summary accurate? Tell us

How accurate was this summary? (1 = poor, 5 = spot on)

Get updates like this by email