BP £10bn profits shows windfall tax is about “basic fairness”

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Responding to the news that BP has made £10 billion in the past year following surging oil and gas prices, Liberal Democrat Leader Ed Davey said:

The truth is that this is about basic fairness. It simply cannot be right these energy companies are making super profits whilst people are too scared to turn their radiators on and terrified there will be a cold snap.

The government has said that a windfall tax would harm investment but this is an absolutely bogus argument. These profits have come out of nowhere, no energy company was expecting them, no investor was either.

A windfall tax is the best way to get money to the people who need it quickly, but also to make sure there is some sense of trust and proportionality in the system.

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9 Comments

  • Brad Barrows 8th Feb '22 - 6:31pm

    By way of context, BP posted a pre-tax loss of £18.1 Bn in 2020. It has now posted a profit that is just over half that figure.

  • Helen Dudden 8th Feb '22 - 6:53pm

    The government is concentrating on capitalism, in other words profit.
    The 6 billion lost on wasted contracts, should be collected legally.
    So again, it’s those caught in the middle, that pay for the foolish action of other’s.

  • Matt Wardman 8th Feb '22 - 7:58pm

    Appropriately regulated capitalism has the best record for delivering prosperity, which is what we all want.

    As for BP, this is nothing like a return to the returns that were previously made, and I note that investment in future energy systems is being rapidly ramped up.

    So I’d say it is quite cynical for these attacks for short-term political gain to be launched on the companies which are investing for our long term future.

    Energy prices can be addressed without stunts, and may in fact come down more quickly than expected, given the reduced demand for the next 6-8 months, and the very large amounts of new capacity due to come on stream quickly, and the interconnector cables which are currently undergoing repair.

    Let’s think long term.

  • Nonconformistradical 8th Feb '22 - 8:23pm

    @Matt Wardman
    “Appropriately regulated capitalism has the best record for delivering prosperity..”

    Do you think it is appropriately regulated?

  • Chris Moore 8th Feb '22 - 8:27pm

    The correct way to raise more tax from the corporate sector is by raising the percentage paid by ALL companies. Not by one-off retrospective taxation.

    The reason BP can sometimes make enormous profits is that they have enormous turnover. There is nothing outstanding about their average profit margin.

    Various mega-tech companies have much higher profit margins

    We

  • @Noncomformist

    A literally unanswerable question, since there are dozens or scores of different methods in different places.

    I think two principles have to be increasing freedom and keeping politicians in their boxes, rule of law (obviously), firm property / ip rights, and separation of regulation and implementation.

    One headache we currently have is the rather blatant conflict of interest in Local Planning Authorities between control of the planning process, and management of social housing. I would not have any housing managed by Councils at all.

  • Helen Dudden 9th Feb '22 - 8:04am

    The increase in energy bills will seriously affect those who are already struggling.
    The government wrote off 6 billion pounds of dodgy contracts.
    There is more time wasted with the law breaking of Johnson and others. We are all accountable to the laws of the land.

  • Nonconformistradical 9th Feb '22 - 8:08am

    @Matt W
    “One headache we currently have is the rather blatant conflict of interest in Local Planning Authorities between control of the planning process, and management of social housing. I would not have any housing managed by Councils at all.”

    So presumably you think developers should be able to build housing wherever they fancy? Always aimed at maximum profit and ignoring the housing needs of the poor and other less well-off? Building on flood plains?

    Who – if anyone – do you think should regulate your magnificent housing scheme?

  • >@Matt W
    “One headache we currently have is the rather blatant conflict of interest in Local Planning Authorities between control of the planning process, and management of social housing. I would not have any housing managed by Councils at all.”

    >So presumably you think developers should be able to build housing wherever they fancy? Always aimed at maximum profit and ignoring the housing needs of the poor and other less well-off? Building on flood plains?

    No. That’s not what I said.

    The planning system is imo clearly regulation.

    I was pointing out the implicit conflict of interest where Councils give themselves planning permission, then owning / managing the resulting Housing. My solution for that would be Housing Associations, ALMOs or similar to run social housing. I am supportive of the current “pepperpotting” strategy amongst normal developments.

    Certainly we can have a conversation about the planning system – an area where I have some experience and have engaged before. But it is a biiiiiigggg subject 🙂 .

    IMO the current saviour of the Planning System as it stands is the Planning Inspectorate, who are the only element more or less free from tactical political considerations with a primary responsibilty to make professional judgements according to law.

    >Who – if anyone – do you think should regulate your magnificent housing scheme?

    Answered above.

    (We might be a little off topic)

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