Boris Johnson siding with energy giants over struggling families, Ed Miliband claims
Visiting a community-owned renewable project in Sheffield, the Shadow Secretary for Climate Change and Net Zero said the Prime Minister’s comments this week highlighted the growing differences between the Conservatives and Labour on the issue.
“On one hand, you have Labour saying we should have a fair windfall tax on the oil and gas producers to help families and to rise to the scale of the crisis that so many are facing,” the Doncaster North MP said.
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Hide Ad“On the other hand, the Conservative Government are siding with the oil and gas producers who are making billions of pounds and leaving millions out in the cold.”
Earlier this month, Ofgem, the energy regulator, announced that bills are set to soar by 54 per cent for 22 million households from the beginning of April, adding £693 to the annual costs of a typical household.
Labour has proposed a 10 percentage point ‘windfall tax’ on North Sea oil and gas producers which they say could raise at least £1.2bn and help cover the costs of removing VAT on domestic energy bills and expanding the Warm Homes Discount Scheme.
During Prime Minister’s Questions on Wednesday, Mr Johnson described Labour’s proposals as “totally ridiculous”.
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Hide AdThe Conservative leader said: “This is a global problem, caused by the spike in gas prices, but what Labour would do is clobber the oil and gas companies right now with a tax that would deter investment in gas, just when this country needs gas as we transition to green fuel. It would be totally ridiculous, and it would raise prices for consumers.”
Mr Miliband said in response that the Government’s own plans - such as Chancellor Rishi Sunak introducing a £200 rebate on energy bills that households will then be obliged to repay at £40 per year over five years - were themselves not sufficient.
“Rishi Sunak’s buy-now pay-later loan scheme is something wholly inadequate to the scale of the crisis that people across our region are facing,” he said.
“You’ve got people with their heads in their hands who literally don’t know how they are going to pay their energy bills.
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Hide Ad“You’ve got the oil and gas companies rubbing their hands as they make billions in profits.
“This week we saw the chief financial officer of BP actually say they had more cash than they knew what to do with.
“They are doing share buybacks, they are not putting this money into investment. We need to act.”
BP reported its highest annual profits in eight years this week, coming shortly after Shell revealed a 14-fold increase in profits as it benefitted from the spike in global prices.
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Hide AdThe group revealed that it swung to a mammoth 12.8 billion US dollar (£9.5bn) underlying profit in 2021 from losses of 5.7bn US dollars (£4.2bn) the previous year thanks to rebounding oil and gas prices.
BP also announced more returns for shareholders, with another 1.5bn US dollars (£1.1bn) of share buybacks before its first-quarter 2022 results and a dividend payout of 5.46 cents (3.37p) a share for the fourth quarter.
In a call with investors, BP chief financial officer Murray Auchincloss said: “It’s possible that we’re getting more cash than we know what to do with.”
BP has insisted that it is heavily investing the profits it makes back into shifting to lower carbon alternatives to fossil fuels as it announced plans alongside its results to boost investment in renewable energy.
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Hide AdThe company argue that a windfall tax would reduce investment in UK gas and renewables.
Mr Miliband said Labour’s proposals could save households around £200 each and up to £600 for the most vulnerable.
Renewable projects 'need greater backing'
Labour has called for greater investment in solar and onshore wind projects to help reduce the UK’s vulnerability to rising global gas prices.
Ed Miliband visited the Heeley Energy House in Sheffield which supports renewable energy projects and schemes to tackle fuel poverty on Friday in a visit also attended by Shadow Climate Change Minister and Sheffield Hallam MP Olivia Blake, as well as Sheffield Heeley MP Louise Haigh and South Yorkshire mayoral candidate Oliver Coppard.
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Hide AdIndependent analysis has suggested that since the 2015 onshore wind moratorium effectively lost the UK 5 gigawatts of energy, which if priced consistently with energy prices, would have equated to £60 per household off average bills.
In October 2021, Renewable UK published a report, which found that planning authorities are approving less than half of the onshore wind capacity that the country needs to install each year to achieve net zero targets.
Mr Miliband said: “The Conservatives’ climate delay has weakened our energy security and made us more vulnerable to the global gas crisis.
“It is unacceptable that the UK lost five years of progress in developing onshore wind. If it was not for the Conservative’s misguided onshore wind moratorium, we would now have more clean energy, which would have lessened the impact of rising gas prices for households.
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Hide Ad“The Conservatives weakened our security by banning onshore wind exactly at the time when the cost of the technology was falling and other European countries were racing ahead with this form of renewable power.
"Labour would give families security with a windfall tax on oil and gas companies enjoying record profits to help fund a package to save households around £200 or more, and up to £600 those feeling the squeeze the most.”
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