UK energy firms could make excess profits totalling £170bn over the next two years, according to Treasury estimates, as millions of households struggle amid the cost of living crisis.
UK energy firms could make excess profits totalling £170bn over the next two years, according to Treasury estimates, as millions of households struggle amid the cost of living crisis.
The obscene profits will likely to lead to further calls for a much wider ranging windfall tax, with the government’s current windfall tax rate of 25% not going far enough as it includes opt-out clauses which reduces the value of the tax from £15bn to £5bn.
Bloomberg reports that Treasury officials will deliver the assessment on the energy companies’ profits 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’.
Excess profits will also be made by electricity generators, with calls for the windfall tax to target not only gas and oil production but also extending it to power generators which have thus far been exempt.
Meanwhile, the frontrunner to replace Boris Johnson, Liz Truss has said that she is opposed to windfall taxes, claiming that they ‘send the wrong message to investors’.
Reacting to the news of the profits being made by energy companies while households struggle, LFF columnist Prem Sikka tweeted: “UK inflation to hit 22%. Gas, oil, electricity industry to make £170bn excess profits.
“Must levy 90%+ windfall tax. Excess profits not made by extra investment/effort but by exploitation of people. Govt must check inflation – freeze energy price”.
Green Party MP Caroline Lucas tweeted: “£170 billion in energy company profits in the next two years – but still Liz Truss says no to increasing #windfalltax on these obscene sums. Protecting energy giants & instead making some of the poorest pay for this #EnergyCrisis is quite simply immoral.”
Basit Mahmood is editor of Left Foot Forward
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