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Britain slaps oil and gas giants on storm taxes over rising energy bills

Snacks used to reject the idea of ​​a storm tax, saying that it sounds “superficially attractive” but will eventually discourage investment.

Leon Neil | Getty Images News | Getty Images

London — UK Treasury Minister Rishi Sunak has imposed a storm tax on oil and gas majors as the government scrambles to mitigate the worsening of the country’s living cost crisis.

Measures the next day Very embarrassing investigation Joining the blockade party on Downing Street, rising inflation is pushing up prices for everything from food to fuel, putting pressure on the ruling Conservative government to do more.

“The oil and gas sector has made extraordinary profits not as a result of risk-taking, innovation and recent changes in efficiency, but as a result of global commodity price hikes partially caused by the Russian war. “There is,” Snack told a member of the Commonwealth House. On thursday.

“And for that reason, I sympathize with the argument that those interests are taxed fairly,” Snack said, urging opposition to ridicule.

According to Snack, the government imposes a “temporary target energy profit tax” with a so-called “investment allowance” to encourage oil and gas companies to reinvest their profits. The new tax will be levied on the profits of oil and gas companies at a rate of 25% before it is phased out when commodity prices return to more normal levels.

The decision to impose a storm tax on energy companies represents yet another U-turn for Prime Minister Boris Johnson’s government.I had a snack before was denied A one-time levy that sounds “superficially attractive” but will eventually discourage investment.

Opposition lawmakers have repeatedly called on the government to impose a one-time tax on energy majors, saying the move would help fund a national support package for households.

British oil and gas giant BP When shell Earlier this month they reported huge quarterly profits as they benefited from soaring commodity prices during the Russian onslaught in Ukraine. It fuels the government’s demand to tax their surplus cash.

“Today, I feel like the Prime Minister has finally noticed a national problem. [is] I’m facing it. ” Rachel Reeves, the shadow finance minister of the opposition Labor Party, said in response to a snack statement.

According to Reeves, the Labor Party first demanded a storm tax on oil and gas companies almost five months ago. He added, “He can’t dare to say a word,” even when Snack finally announced a one-time levy, “dare not to speak the name.”

“For months it was clear that more was needed to help people withdraw the bill, so what did this government take so long?” Reeves said. .. “This government dithering has done a great deal of damage to our country.”

Sterling It was mixed traded on Thursday afternoon for about $ 1.2565.

What other measures have been announced?

Soaring inflation is causing “serious pain,” Snack said, and the economic situation will be more serious this year.

Inflation in the UK surged to 9% last month as food and energy prices soared. Reach the highest annual rate in 40 years..Bank of England expect Inflation will rise above 10% later this year.

Approximately 8 million low-income households will be sent a one-time living fee of £ 650 ($ 819), Snack said. The first payment will be issued directly to people’s bank accounts in July and the second payment will be remitted in the fall.

The Minister of Finance has announced that 8 million pensioner households will receive an additional £ 300 for winter fuel and £ 150 for temporary disability living expenses.

Snack also said he no longer had to repay a £ 200 loan for energy bills, increasing support for the household to £ 400.

UK oil and gas giants BP and Shell reported earlier this month that they made huge quarterly profits.

Kristian Buus | With Photos | Getty Images

Total living expenses announced Thursday reached £ 15 billion, and total living expenses support provided this year was £ 37 billion.

“Additional support for 8 million people for low-income earners is the right approach and will help a lot of people,” Miatta Fanbul, CEO of the New Economics Foundation, said on Twitter. Stated.

“But a one-time payment of £ 650 doesn’t start to recover the big hole in social security that leaves these families very vulnerable to #CostOfLivingCrisis.”

Paul Johnson, director of the Institute for Fiscal Studies, described the measure as a “big and expensive package” of snacks.

“I was disappointed to hear the Prime Minister insist on a tax cut and come to a conclusion again. He is definitely not. He is raising the tax cut to a historically high level,” Johnson said on Twitter. rice field. “I think that’s right, but his tax system, as he keeps saying, is not a tax cut, but a tax increase,” he said.

“Nightmare scenario”

Earlier this week, Head of Ofgem, UK Energy Sector Regulatory Authority caveat The most widely used consumer energy price cap is set to rise £ 800 in October, with a typical household billing £ 2,800 per year.

The proposed upper limit will jump significantly from the current level of £ 1,971. When introduced last monthRepresented a record rise of £ 700.

“Price volatility seen in the gas market is a once-in-a-generation event that hasn’t been seen since the oil crisis of the 1970s,” Ofgem CEO Jonathan Breary was a member of the Business, Energy and Industrial Strategy Committee on Tuesday. Told to. ..

He added that the proposed price cap surge in October could nearly double the number of households in fuel poverty from 6.5 million to 12 million. Fuel poverty is when the household cannot afford to heat the house to the proper temperature.

Campaign participants said they expected a further rise in energy prices this winter.Nightmare scenarioOnly an emergency budget can solve the crisis surrounding the world’s fifth-largest economy.

The End Fuel Poverty Coalition will see thousands more winters in 2022 and 2023, mainly due to cold homes, among the elderly and vulnerable, if fuel poverty levels reach the predicted limits. It is estimated that there will be deaths.

Brenda Boardman, an emeritus fellow at the Institute for Environmental Change at Oxford University and a researcher at low carbon energy, said:

“We urgently need an energy market designed around consumer needs, not supplier needs. This is ultimately life and death, and comfort, after all. Health and pediatric development. “

Britain slaps oil and gas giants on storm taxes over rising energy bills

Source link Britain slaps oil and gas giants on storm taxes over rising energy bills

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