According to Bloomberg this morning:
UK gas producers and electricity generators may make excess profits totaling as much as £170 billion ($199 billion) over the next two years, according to Treasury estimates that lay bare the revenue-raising potential of a windfall tax.
Treasury officials will deliver the assessment to the next prime minister when they take office on Sept. 6, according to a person familiar with the matter, who asked not to be identified discussing internal calculations.
The Treasury apparently denied awareness of this data.
I have four questions. First, if this is true why aren't Tories talking about it?
Second, why is the existing windfall profits tax set at 25%, with massive loopholes to undermine that rate built in?
Third, when will the scope and rate of this tax be increased, substantially?
Fourth, when will measures to stop these profits arising be taken, as noted here by me?
We need to know.
Last, when will this be extended to banks profiting from interest rate rises?
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why stop at energy companies and banks?., for example local builders are fleecing customers at the moment
Really?
Possibly not the builder’s fault.
Prices of components are going up because of oil based production and transport costs.
BREXIT continues to hamper supply chains.
Our lack of investment in domestic trades and training means there are fewer brick layers, gas engineers etc., so hourly rates go up.
All these get passed onto those who want builders.
Do they realise this when they ignorantly vote Tory? I bet many many don’t.
What goes around comes around as they say.
Don’t blame the builder – LOOK UP!
interesting when it comes to self employed tradesman, they nearly always want to be paid in cash..obviously to avoid paying tax
Not my experience these days
No james, we just want to be paid quickly.
Cheques are a pain in the rear, because it chews up unpaid, unproductive time putting them in the bank, so cash was preferred. These days, an electronic transfer is by far my preferred method of receiving payment. Cash is useless if you need the funds to order materials online.
Precisely
Strange, but utterly predictable, that this mornings’s government-owned BBC Radio 4 ‘ objective’ numbers programme ‘More or Less’ concluded that nothing can be done about these profits.
‘surprise’
Please don’t get me started on the BBC…………………!!!!
I heard that as well. Very shoddy work. I expect they’ll be getting an avalanche of emails over it. I’ll certainly be adding my halfpennyworth.
Yes, I just heard that as well! Spent half the section talking about retail profit (negligible) and green levies (4% of prices). Then “wholesale is the problem but it’s all an international market and we can’t do anything about it” in a minute at the end. Also no mention of the marginal cost pricing system. Pathetic. I will email them now moreorless@bbc.co.uk
A bit off topic, but I was looking at the headline inflation figures and they just don’t seem to corroborate with what I’m seeing in real life.
Am I right in understanding that monthly inflation figures are compared with prices 12 months prior?
Because from where I’m standing (Netherlands) I reckon chicken alone has gone up by about 35%. Peppers are about 60% up. And these figures way exceed what the headline inflation figures state, and that’s before even looking at energy prices.
Food is way above the average rate
You just don’t buy enough toasters, where the rate is lower
I’d question whether HMRC is functionally capable of going after windfall profits in the oil & gas sectors, even if there was political will, given the erosion of its capacity to act.
Perhaps the way forward is the imposition of a price cap on UK-sourced gas. £20/MWh would be fair & reflective of long run prices.
In the case of the CAPEX generators – that is easier but still with problems, given they do sell some capacity forward (ditto the oil & gas hooligans). That said, as the big-blog on Elec Market Reform noted – perhaps the best way is EMR. Fix the cause, not the symptom/problem.
Here in EU-land gas price caps are all the rage (the politicos understand them see) – with DG Comp’ pulling its hair out and doing a fair imitation of Munchs “Scream”. Whatever happens need to happen fast – as industry starts to shut up shop.
https://www.brusselstimes.com/belgium/278843/spiralling-energy-costs-force-belgian-companies-to-shut-down
The 25% windfall tax is a misnomer and a con. There are numerous exclusions and at best, it will be less than 2% of its Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) of BP and Shell.
Then to sweeten the pill, the government has handed extra tax reliefs and subsidies to oil and gas companies.
https://leftfootforward.org/2022/07/prem-sikka-why-the-governments-windfall-tax-on-oil-and-gas-companies-doesnt-go-far-enough/
Agreed
Having read Prem’s link, it should be called the ‘Gesture Tax’, because that’s all it really is. It seems riven with the sort of stuff your country to country reporting is trying to deal with? If the world is catching onto CtC reporting, the UK certainly is not.
What a surprise!
Rather than calling it a windfall tax why not call it a Survival of Capitalism Tax?
Pay this nicely or you might a revolution instead
If at 90% why would it be that?
We also need Ofgem to be taken to court for not doing their job properly.
https://goodlawproject.org/news/ofgem-court-action-vulnerable-people/
Don’t we already have a windfall tax in Corporation tax? If a company has a windfall and their profits shoot up, the tax on those profits also shoots up.
At a flat rate of 19%
That means an 81% windfall gain in this case
This just shows how ridiculous energy pricing is.
https://www.euronews.com/green/2022/09/01/fuel-poverty-could-hit-anyone-earning-under-120k-on-these-remote-uk-islands
This is The Shetlands.