Climate campaigners and elected officials in the United Kingdom were outraged Tuesday over reporting that a leaked government analysis shows U.K. gas producers and electricity generators could make up to £170 billion, or roughly $200 billion, in excess profits the next two years as Britons endure price hikes amid a cost-of-living crisis.
"Ministers must tax these profits and urgently cancel the energy bill increase."
"The Treasury analysis suggests about two-fifths of the £170 billion in excess profits would be attributable to power producers, suggesting extension of the windfall tax could be lucrative for the government coffers," Bloomberg reported, referring to a 25% energy profits levy passed this spring.
The outlet added that "Treasury officials will deliver the assessment to the next prime minister when they take office on September 6, according to a person familiar with the matter, who asked not to be identified discussing internal calculations."
A Treasury spokesperson said that "we don't recognize this analysis" but "the government has been clear that it wants to see the oil and gas sector reinvest its profits to support the economy, jobs, and the U.K.'s energy security."
"We also expect our newly introduced energy profits levy to raise an extra £5 billion in its first year to help pay for our £37 billion support package for households," the spokesperson noted.
Meanwhile, 350.org Europe tweeted in response to the reporting that "record profits and record poverty are not a coincidence. They are part of the same broken energy system."
Trades Union Congress, a federation of unions in the U.K., declared that "ministers must tax these profits and urgently cancel the energy bill increase."
Britain's energy regulator, Ofgem, announced last week that as of October 1, the annual cap on consumers' energy bills will skyrocket from £1,971 to £3,549, or over $4,000. Bloomberg highlighted that the "amount is expected to go even higher in January as the U.K. competes with other nations for limited gas supplies."
Fossil fuel companies' soaring profits this year have elicited global accusations of war profiteering and price gouging to serve shareholders at the expense of consumers—and fueled demands for policymakers in the U.K. and beyond to respond with windfall taxes.
As the Independent outlined Wednesday:
Tory leadership candidates Liz Truss and Rishi Sunak are under growing pressure to freeze the energy price cap rise or agree to a huge expansion in financial support to ease the pain of soaring bills.
[...]
Labour and the Liberal Democrats have called for an expansion in the windfall tax on gas and oil sector profits to help pay for a energy price cap freeze this winter.
Some members of the U.K. Parliament renewed such calls in light of Bloomberg's report:
"This is inhumane," asserted Scottish Labour Leader Anas Sarwar. "Freeze prices now and impose a meaningful windfall tax!"
Polling provided exclusively to The Guardian earlier this month shows 73% of U.K. voters across party lines support temporarily renationalizing energy companies if they can't lower bills and 86% favor freezing the energy price cap at £1,971.
However, Bloomberg pointed out that though Sunak announced the 25% levy while serving as chancellor of the exchequer and has suggested he'd aim to raise more from energy companies, both Truss—who is widely expected to become prime minister—and Kwasi Kwarteng, who's likely to serve as her chancellor, have signaled their opposition to windfall taxes.
This content originally appeared on Common Dreams - Breaking News & Views for the Progressive Community and was authored by Jessica Corbett.
Jessica Corbett | Radio Free (2022-08-31T17:35:41+00:00) ‘Simply Immoral’: Leaked Doc Shows UK Energy Giants to Make £170 Billion in Excess Profits. Retrieved from https://www.radiofree.org/2022/08/31/simply-immoral-leaked-doc-shows-uk-energy-giants-to-make-170-billion-in-excess-profits/
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