In early November 2021, FPA wrote to Alok Sharma as President of during the COP26 climate conference in Glasgow, demanding a Windfall Tax on fossil fuel corporations which were already reaping huge profits from the prices they were able to command. A windfall tax was not yet being talked about by anyone, and our letter was ignored. Since then the idea has been taken up by a tidal wave of organisations, including political parties, and, as in our November letter it’s been connected to demanding help for people who can’t afford to heat their homes.
On 26 May 2022 Rishi Sunak finally did announce a Windfall Tax and linked it to a purportedly “generous” giveaway of help for energy customers. Sadly, neither the Tax nor the help fit what is now required. The Windfall Tax takes from the fossil fuel industry with one hand while giving with the other. On the same day, the Government announced that they would give corporations 91p for every pound they invest in gas and oil extraction from the North Sea. Ninety one pence in the pound for investing in their own business – and pocketing the profits that result! All while the basic corporation tax on oil giants is the most generous in the world – 40% instead of the average 70% elsewhere.
Energy For All will be funded by:
- a Windfall Tax,
- an end to the massive subsidies now going to oil and gas producers, traders and suppliers – subsidies from the taxpayer that are worth millions of pounds every day –
- higher tariffs for people who use far more energy than they actually need.
When – as must happen – the super profits currently rolling into company coffers come to an end, and the Windfall Tax disappears, there will still be plenty for e4a from the other sources. And as time goes on, less will be needed as energy efficiency programmes and a switch to renewables reduce both the need for energy, and its cost.
Windfall tax consultation response (June 2022)
On 26 May the government announced a windfall tax (or a “levy” on the super-profits of oil and gas companies, with the proceeds to help pay for support for people struggling with their bills. They also announced that they would fund investment in North Sea oil to the tune of 91p in the pound.
The tax and the “investment allowance” require legislation, which in turn requires consultation. They gave the public a shockingly short 7 days to respond. FPA has since early May been a member of a coalition of groups fighting for a windfall tax and sharing information and analysis. You can read our full consultation response here, which draws heavily on the structure and content of the response from another coalition member: Uplift.
Fuel Poverty Action Media Coverage on Windfall Taxes
Ruth London discusses Rishi Sunak’s Spring Statement on LBC
‘They’re making huge profits off the back of people not being able to afford to live.’
Ruth London tells LBC ‘the energy companies are minting it’ amid the cost of living crisis and should be subject to a windfall tax. 27 March 2022
The Morning Star: ‘Out of touch and out of ideas’: Labour takes aim at the Tories as local elections kick off
Fuel Poverty Action comments on the energy companies’ windfall tax, Energy For All ,and responds to Rishi Sunak who had said he would “wait and see” what happens on energy prices. “We know what will happen, Mr Sunak. People will die. But they won’t be people in your family.” 4 May 2022
Resources on Windfall Taxes
Ruth London’s talk on windfall taxes at the Right to Energy Forum 2022
This talk focuses on windfall taxes and how to avoid remedies for the gas price crisis that end up subsidising fossil fuels. Does the oil industry have us “over a barrel” – freezing if the state does not subsidise prices frying if they do? Or could Energy For All be a solution to that dilemma? The question this talk poses is key to our strategy for liberation from the shackles we are held in.