Thank you for contacting me about energy prices and a windfall tax on fossil fuel companies. I agree with you on this important issue. I believe we need to levy a windfall tax on oil and gas producers to help the millions of families facing the cost-of-living crisis.
We have known for months that a massive increase in energy prices was coming that will push millions of households into fuel stress. It was for this reason that on 1 February I supported a motion in the House of Commons calling for the Government to introduce a windfall tax on the profits of North Sea oil and gas producers. This would help fund a package of support for families facing the energy price crisis, including immediately reducing VAT on energy bills to zero and smoothing the costs of energy supplier failure – together saving most households around £200 – and increasing the warm home discount to £400 while extending it to nine million families.
Unfortunately, the Government rejected this plan that would benefit all households immediately and take £600 off the energy bills of those on the lowest incomes. Instead, it announced measures worth only £350 off household bills – including £200 that will not come until October and that bill payers will have to pay back as a surcharge later, and a £150 council tax rebate that many pensioners and people on low incomes will not automatically be eligible for. With Ofgem confirming a £693 increase in the energy price cap, this will still leave families in Britain – including some of the poorest – paying hundreds of pounds more for their energy from April.
Furthermore, the Government’s plans load up future costs for households, rather than asking fossil fuel companies to make any extra contribution. The Government says it does not want a windfall tax on North Sea oil and gas producers, with a Cabinet Minister even describing them as “struggling”. Yet these companies are seeing soaring revenues, with Shell’s profits quadrupling to $20 billion while BP’s have reached an eight-year high of $13 billion.
I can therefore assure you that I will continue to support efforts to press the Government on this issue, as well as calls for action to keep energy bills low in the longer-term by accelerating home-grown renewables and getting homes insulated.
Thank you once again for contacting me.