Labour has called on the Tory government to use Thursday’s meeting with oil and gas giants in Downing Street to close a “shameful” loophole in the windfall tax.
Rachel Reeves, Labour’s Shadow Chancellor, said the Tories were handing the oil and gas giants billions in tax breaks, just for them to pass it on to shareholders.
The MP highlighted how the government’s own energy profits levy factsheet shows that the new investment allowances within the levy means that for every £1 invested, 91.25p will go back to firms in additional tax relief.
Reeves said: “The government should be ashamed this loophole existed in the first place. This isn’t right at a time when people are worried sick about how they’ll pay their bills.”
Oil and gas producers have announced bumper profits on the back of rising prices while consumers are facing the nightmare of soaring energy bills which they cannot pay without government help.
The chief executive of BP, Bernard Looney, previously described current high prices as a “cash machine” for the company, while its chief financial officer said they have “more money than they know what to do with” if prices stayed high.
Reeves said that acting chancellor Nadhim Sahawi should carpet the oil companies in a crisis summit being held on Thursday and take more action against the companies.
Labour demanded the windfall tax on energy companies to bail out consumers 137 days earlier than the government was dragged into announcing it.
The 25 per cent levy on this year’s profits will raise £5 billion but Labour revealed that by delaying the government lost out on around £1.9 billion that could have been put towards public services.
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