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A dirty profits tax will bill energy giants for rising energy costs

A dirty profits tax will bill energy giants for rising energy costs
3 min read

While millions of people are facing crisis as their energy bills soar, oil and gas companies are making record-breaking profits.

The billions of pounds in windfall profits being scooped up by the likes of BP and Shell could go to helping families who have to choose between heating and eating. Instead, the Tories – who have registered £1.3m in gifts and donations from climate sceptics and fossil fuel interests since the last election –are transferring more public funds into fossil fuel companies.

While eye-watering bills land on our door mats, three of the largest energy companies operating in the North Sea are effectively paying negative rates of tax. This is because the subsidies they are handed by the government to extract and produce fossil fuels far out-strips anything they pay in taxation.

On top of this, Exxon, BP and Shell have all received net tax repayments totalling hundreds of millions of pounds because of a policy that allows oil and gas companies to claim back public money in order to help with decommissioning rigs and infrastructure.

This is in stark contrast to countries like Norway, where they have proposed a special tax rate of 72 per cent on oil firms, while a reimbursement system for exploration costs – effectively, a subsidy for fossil fuel companies to continue their work – is phased out.

Gas is only a transition fuel to a future climate nightmare

Yet, the Chancellor Rishi Sunak wants to put more money into the very fossil fuel industry that has led us into the energy crisis. He wants to increase investment in new fossil fuel drilling, arguing we should exploit our domestic resources and that we will need natural gas as part of our transition to cleaner energy.

Gas is only a transition fuel to a future climate nightmare. We need to follow through on the promises made at the COP26 climate talks in Glasgow about leaving the fossil fuel era behind and invest, first, in energy efficiency, and then in our bountiful domestic sources of renewable energy.

While the Conservatives seem hell-bent on transitioning to a climate nightmare with ever-higher energy costs, Greens are calling for a windfall tax on the energy producing giants - a “dirty profit tax”. We know that these profits have been made at the expense of our climate and the public, many of whom now face fuel poverty. This dirty profit tax will ensure the polluter pays and not those struggling to make ends meet, creating fairness in a time of struggle. 

Long-term, we need to ensure that heating bills do not drain people of the finances they need to live their lives. That can be done through insulating homes and investing in renewable energy.

The cheapest energy bill is the one you don’t have to pay because your home is so well insulated it is almost free to heat. This is not a fantasy, it is something Green councillors are pushing for and delivering at a local level, from Lewes to Kirklees and Stroud to Brighton and Hove.

But in the immediate term, while we have people sick and dying in homes that leak heat, we need to support their incomes by taxing the oil and gas companies. We must ensure the urgency of this rises above the new culture war being pushed by Tory politicians.

Their deceitful attempt to link tackling climate change with the cost-of-living crisis and their calls for cuts to green taxes and an increase of fossil fuel production must be resisted and instead, we must invest in the action that will end fuel poverty now and take us off the road to climate ruin.

 

Amelia Womack is Deputy Leader of the Green Party. 

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