Shadow climate secretary Ed Miliband has accused the government of “shamefully” refusing to tackle rising energy bills, ahead of today’s local elections in over 4000 local authorities.
His comments come after Shell announced that their first quarter earnings amounted to £7 billion, with BP having recorded Q1 profits of £5 billion earlier this week.
This is due to the fact that wholesale gas prices have soared around the globe.
New research by the Liberal Democrats argues that a windfall tax on oil and gas companies would raise around £10.5 billion from the profits of BP and Shell alone this year,
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The analysis shows that if both oil giants saw a similar increase in profits throughout the year, they could be expected to make around £68 billion in profits, an increase of £42.2 billion compared to last year. A 25 per cent windfall tax on these excess profits, as has been introduced in Italy, would therefore raise £10.5 billion from just Shell and BP alone.
It means a windfall tax on the oil and gas sector as a whole could raise at least £12 billion.
Liberal Democrat leader Ed Davey said: “Boris Johnson and Rishi Sunak’s refusal to tax the super profits of energy companies is completely unforgivable when people are too terrified to heat their homes.
“The excuses of Conservative ministers have been demolished by the boss of BP himself, who said a windfall tax wouldn’t damage investment in the UK.
“This one-off levy would raise billions of pounds that could help vulnerable families with their energy bills now. It’s simple.
“Pensioners are having to ride all day in buses to keep warm while families are forced to choose between eating and heating. The government cannot wait any longer to act.”
Greenpeace UK’s oil and gas campaigner, Philip Evans, said: “A windfall tax on these unexpected record profits of unimaginable sums would be the fastest and fairest way to ease pressure on households feeling the pinch and reduce our dependence on oil and gas, which is the root cause of the cost of living crisis, while slashing future emissions.
“By using a big chunk of the bloated profits that Shell, BP and others are raking in to make homes warmer, more energy efficient and kitted out with heat pumps, the government could start to really tackle the climate and cost of living crises simultaneously.
Reacting to the bumper profits, Friends of the Earth campaigner Connor Schwartz, said: “While giant fossil fuel firms like Shell post massive profits, millions of people are struggling with sky-rocketing energy bills and living in heat leaking homes.
“A tax on these excess profits could help pay for a nationwide free insulation programme, rolled out street-by-street, focussing on those most in need first.
“There’s no time to waste. Insulate your home and invest in reliable, cheap renewable power to reduce your energy bills. This is the fastest way to lower your energy bills. And it starts with a windfall tax on fossil fuel companies.”