Speaking Tuesday at the organization’s annual conference in Aberdeen, the head of Offshore Energies UK (OEUK) Deirdre Mitchi said: “Now the debate on excessive taxes is at the top of the policy-driven agenda.

“This means we face the threat of punitive taxes and regulations, just at a time when the UK needs to focus on long-term issues such as energy security and zero work.

“Our belief is that the stability of how we tax and regulate is what allows us to stimulate investment, create jobs and create taxes that can be used to help with the cost of living crisis, and at the same time it is time to get the right balance in terms of ensuring the country’s energy security. “

Is it fair to call on the government to issue a tax?

In the first three months of the year, BP’s base profit more than doubled to £ 4.8 billion, although this is said to have been canceled as a result of its decision to abandon its investments in Russian oil companies.

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During the same period, Shell’s profit almost tripled, providing the highest quarterly profit of 7.3 billion pounds. Although similar to BP, the exit from Russian oil investment cost it 3.1 billion pounds.

However, companies have spent billions on “share repurchases” and are also paying relatively high dividends, which many will argue that the tax could negatively affect these investments.

Has a tax on unexpected income been issued before?

The most famous tax on unexpected income issued in the UK was when Labor Chancellor Gordon Brown in 1997 placed a tax on companies set up after the previous privatization of nationalized production by conservative governments.

According to the Institute for Fiscal Research, the tax in two years has raised up to 5.2 billion pounds.

Conservative Chancellor Jeffrey Howe issued a similar one-time fee from banks in 1981, claiming they benefited from high interest rates. This was expected to result in £ 400 million (equivalent to around £ 3 billion in today’s money).

Can the government allocate a tax on windfall revenues?

Earlier, Mr. Johnson said the tax on windfall income hinders investment, but recently he said that “no option is ruled out” if firms do not invest enough in new projects.

However, Mr Johnson said it was better for companies to invest in renewable energy than to pay extra tax.

Business Secretary Kwasi Quarteng said any decisions on an unexpected tax from oil and gas companies were the work of Chancellor Rishi Sunak.

Mr Quarteng said: “I have been very clear about the income tax. I don’t think it supports investment, I don’t think it’s necessarily right.

“But, as I always say, it depends on the chancellor. He sees the economy all over, he is in charge of fiscal policy.

“He is instinctively against the tax on unexpected income, but if he feels that these extraordinary times require extraordinary measures, it is his business.”

However, Simon Clark, chief secretary of the Treasury, told Sky News that the government recognizes a “real problem for households up and down the country”, which is likely to worsen again in the autumn when energy prices rise again.

He said: “As for the very concept of a tax on windfall profits, we are very clear that at a time when the industry is making very significant profits, there is a real need to reinvest these profits in new offshore facilities – to get more from the North Sea, which is obviously vital in terms of energy supply, but also good for jobs and the economy as a whole.

“If we don’t see the investment materializing, then we’re very clear that all the options are on the table.”



https:///news/uk/1615344/what-is-a-windfall-tax-bp-shell-oil-gas-energy-evg

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