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Cost of living: Windfall tax won’t help energy companies as Sunak considers including green producers in levy | UK News

In an open letter to the prime minister and the chancellor, a plea was made against an unexpected tax on energy companies.

There has been increasing political pressure on the UK Government for a one-off additional tax to fund support for customers facing and struggling with higher energy bills Cost of Living Crisis.

But in response, 31 organizations in Britain’s offshore energy supply chain have written a letter calling for an end to speculation about such a tax.

They say such a move would not help consumers in the long term and would only further reduce investor confidence in the UK.

The Treasury Department has declined to reference a Financial Times report Chancellor Rishi Sunak is considering a levy on the profits of wind farms and oil and gas companies.

Picture:
Chancellor Rishi Sunak

According to the newspaper, a government insider has said “oil and gas producers in the North Sea are only half the battle” as high gas prices have boosted profits everything power generators.

Mr Sunak, like Boris Johnson, has expressed reluctance to go down the route of a windfall tax, but he has acknowledged the need to be “pragmatic” amid cost of living pressures.

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Boris Johnson hints we will do more to fuel the cost-of-living crisis

The Prime Minister has promised further aid to support struggling households but previously said he was “not attracted” to the idea of ​​new taxes.

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In the letter, issued on Tuesday by trade body Offshore Energies UK (OEUK), which represents more than 400 companies in the sector, the signatories warn that the sector is only in the early days of a recovery after surging in the recent past suffered significant losses during downturns.

It states: “A one-off windfall tax on energy producers will not provide any lasting benefit to consumers and will only further reduce investor confidence in the UK, the effects of which will be felt for many years to come.”

Great Britain is losing its attractiveness

“And it will do nothing to address the cyclical nature of an energy system linked to global supply and demand, as the UK will become much less attractive to investors who will look elsewhere for the long-term stability they need to make large.” to advance energy projects.”

It goes on to say that any “surprise windfall tax” risks operators – big or small – scale back their investment plans in response to what could impact jobs.

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Former Health Secretary Jeremy Hunt says it’s “difficult to justify energy company profits”.

Thousands of jobs lost

“The impact of an investment halt will be felt throughout the supply chain, through jobs and the communities this industry supports, both directly and indirectly.

“For the tens of thousands of jobs this industry supports, the long-term impact of a windfall tax will be even greater.

“This is in no small part because this follows a downturn that was particularly hard hit by the supply chain side of the industry, with thousands of manufacturing jobs lost across the country.”

OEUK chief executive Deirdre Michie added that after “significant downturns” in the industry, investment in cleaner energy and the sector that supports it should be encouraged

Pressure for a windfall tax came from Labor but also from some senior Tories.

Labor proposes eliminating VAT on invoices for a year and introducing a windfall tax for oil and gas producers in the North Sea

A Treasury spokesman said: “We understand people are struggling as prices rise and while we cannot protect everyone from the global challenges we face, we are supporting UK families with a £22 billion support package, to get through the coming months.”

The 31 signatories to the letter are: 3T Energy Group, Aker Offshore Wind, Apollo, Aubin Group, Baker Hughes, Bilfinger, Blade Energy Partners, Carjon-NRG, Dron Dickson, Exceed, Fennex, Global E&C, Halliburton, Hydrasun, ODE Asset Management , Offshore Water Management, Optimus Plus, PD&MS Group, Petrofac, Ponticelli, Prodrill Energy Resource Solutions, Semco Maritime, Stork, Subsea7, TechnipFMC, Tees Medical Services, Texo Group, Three60 Energy Group, Vysus Group, Wood and Worley.

Cost of living: Windfall tax won’t help energy companies as Sunak considers including green producers in levy | UK News

Source link Cost of living: Windfall tax won’t help energy companies as Sunak considers including green producers in levy | UK News

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