Latest news with #windfalltax
The Guardian
12 hours ago
- Business
- The Guardian
Reeves promised oil industry ‘quid pro quo' over windfall tax in private meeting
The chancellor, Rachel Reeves, told a fossil fuel company the industry would receive a 'quid pro quo' in return for higher taxes on its windfall profits, it can be revealed. In a meeting with the Norwegian state energy company Equinor on 27 August, Reeves suggested that the government's carbon capture, usage and storage (CCUS) subsidies were a payoff for oil firms being hit with a higher tax rate. Minutes of the meeting obtained by DeSmog and seen by the Guardian state that Equinor's CEO, Anders Opedal, raised concerns over the energy profits levy – also known as the 'windfall tax' – and 'its impact on the value' of Equinor's UK portfolio. In response, Reeves said that raising the windfall tax from 35% to 38% was a 'manifesto commitment', but stated that 'Equinor should recognise the quid pro quo – the funds raised enable government investment in CCUS etc'. CCUS is the controversial practice of trapping the emissions produced by fossil fuel plants before they enter the atmosphere. Many scientific experts have suggested the technology is not economically viable. It is accused of being a favourite climate 'solution' of the fossil fuel industry since it allows for the continued extraction of oil and gas. The Labour government announced in October it would provide £22bn in subsidies to CCUS projects over 25 years after an increase in lobbying by the fossil fuel industry. The Green party co-leader, Carla Denyer, said Reeves and the Labour government had been 'caught out making promises in a secret exchange deal which goes against the interests of the British people'. The MP for Bristol Central added: 'In public, they claim to be taxing fossil fuel giants more fairly by raising the windfall tax, but behind closed doors they are giving back with dodgy deals to allow the fossil fuel corporates to continue with business as usual under the guise of CCUS – an expensive distraction and largely unproven technology.' Equinor is one of the main companies investing in the UK's CCUS sector. In December, the government signed deals with Equinor, BP and TotalEnergies to develop carbon capture facilities in Teesside. This will involve the development of the Net Zero Teesside power plant, which will be 25% owned by Equinor and aims to be the world's first gas-fired power station featuring CCUS. Earlier this year, Equinor was forced to retract a claim that it stores 1m tonnes of carbon dioxide annually at its flagship carbon capture project in the North Sea. Equinor has not captured 1m tonnes of CO2 per year at the site since 2001, and only captured a 10th of that figure in 2023. Equinor made a $28.7bn (£21.2bn) post-tax profit in 2022 after Russia's invasion of Ukraine triggered higher oil and gas prices – a figure that stood at $8.8bn in 2024. Tessa Khan, the executive director of the campaign group Uplift, said: 'Oil companies like Equinor have held sway over successive UK governments, for years shaping policies to benefit their bottom line and slowing down climate action. This Labour government must stand up to them and put our needs – for affordable clean energy and a safe climate that we can pass on to our children – ahead of their insatiable need to profit.' The House of Commons' public accounts committee, which scrutinises government spending decisions, released a report in February describing the UK's £22bn CCUS subsidies as 'risky'. The report noted that the government has downgraded its ambitions for CCUS storage, scrapping its previous commitment of storing 20 to 30m tonnes annually by 2030. It also highlighted that the UK's new CCUS projects do not allow the government to share any potential profits, or for local consumers to benefit from lower energy bills. The committee also reported that producing liquid natural gas, which will be used in the UK's CCUS projects, leaks more greenhouse gases into the atmosphere than previously thought. 'This could undermine the rationale for pursuing certain schemes,' the report said. After being sued by the environmental consultant Andrew Boswell over the Net Zero Teesside scheme, the previous Conservative government admitted it had not taken into account the plant's full potential emissions, which Boswell estimated could reach more than 20.3m tonnes of carbon dioxide equivalent during its lifetime. In summer 2024, a judge rejected Boswell's case, which argued that officials did not fully explore the environmental impacts of the scheme before approving it. The government also won the appeal in May. Sign up to First Edition Our morning email breaks down the key stories of the day, telling you what's happening and why it matters after newsletter promotion Boswell, who leads the Scrap Carbon Capture campaign, called Reeves's Equinor meeting 'an outrageous spectacle'. He said: 'She begs Norway's oil colossus to tax its huge profits, and then gifts it with far more in return – many billions over decades for climate-wrecking CCUS.' Equinor and Shell have formed a joint venture to become the UK's largest North Sea fossil fuel producer. In November, the government admitted it had unlawfully approved the development of the UK's largest untapped oilfield, Rosebank, which is operated by Equinor, by not taking into account the climate effects of the combustion of oil and gas to be extracted from the field. Equinor intends to reapply for approval to develop the field. The Labour government has been steadfast in its support for the UK achieving net zero emissions by 2050, with Keir Starmer having said 'homegrown clean energy' is 'in the DNA' of his administration. The Climate Change Committee stated in its 2025 appraisal of the government's net zero policies that the UK needs to scale up its CCUS capacity to 73m tonnes-a-year by 2050 to help meet its climate commitments. 'Investment in carbon capture and storage is a gamble on unproven technology,' said Lily-Rose Ellis, a campaigner at Greenpeace UK. 'All it does is give oil and gas giants carte blanche to continue causing planet-destroying emissions in the hopes that one day they might be able to capture the carbon and store it for all of eternity. Public money should be spent on renewables, which guarantee to lower emissions, bring bills down and boost the economy with new jobs.' A spokesperson for Equinor said: 'Equinor has been a reliable energy partner to the UK for over 40 years, providing a stable supply of oil and gas, developing the UK's offshore wind industry, and pioneering solutions to decarbonise the UK economy, including carbon capture and storage. 'Using our experience of decarbonising energy production in Norway, including safely storing carbon emissions under the North Sea for over 25 years, we are supporting the UK to develop its own homegrown energy transition.' A government spokesperson said: 'We are delivering first-of-a-kind carbon capture projects in the UK, supporting thousands of jobs across the country, reigniting industrial heartlands and tackling the climate crisis. Money raised from changes to the energy profits levy made at autumn budget last year support the transition to clean energy, enhance energy security and independence, provide sustainable jobs for the future, and help protect electricity bills against future price shocks.'
Daily Mail
6 days ago
- Business
- Daily Mail
Kemi Badenoch calls for Windfall Tax on North Sea oil and gas to be scrapped as she tries to counter Reform surge in Scotland
Kemi Badenoch called for the windfall tax on North Sea oil and gas to be scrapped today as she tried to boost the Tories in Scotland. The Conservative leader vowed to 'stand up' for the industry - saying it might not exist in a few years unless the levy is removed. The intervention came as Ms Badenoch addressed the Scottish Tories' conference in Edinburgh - urging them to counter Reform's surge. The Windfall Tax on profits was originally introduced by the Conservatives amid soaring prices. But Ms Badenoch said it now needs to go. 'Frankly if it is allowed to remain in place until 2030, as is Labour's current plan, there will be no industry left to tax,' she said. 'Thousands will have been made unemployed and all the while we import more gas from overseas – from the very same basin in which we are banned from drilling.' She said the Tories would also scrap the ban on new licences for oil and gas developments, implemented as part of Ed Miliband's Net Zero drive. 'We will champion our own industry,' Mrs Badenoch told supporters. 'We will let this great British, great Scottish industry thrive, grow and create jobs – ensuring our energy security for generations to come and making Scotland richer in the process.' Hitting out at Reform – which has boasted of hitting 11,000 members in Scotland – she said Nigel Farage did not view the union between Scotland and England as 'that important'. In contrast, Mrs Badenoch stressed the Conservatives will 'always be proud' of the union. 'Our party will always be ready to protect Scotland's place in the United Kingdom,' she added. She claimed for Labour and Sir Keir Starmer, belief in the union is 'negotiable', like 'every so-called promise' the Prime Minister makes. Mrs Badenoch said: 'We know that when it really matters, like on gender or free speech or taxes, Labour will fold and vote with the SNP.' She went on to say: 'In April this year, Nigel Farage said he would be fine with the SNP winning another five years in power. 'He's fine with another five years of higher bills, longer waiting lists, declining school standards, gender madness, and ultimately, independence.' Mrs Badenoch said: 'Reform will vote to let the SNP in, Conservatives will only ever vote to get the nationalists out.' Her speech came just over a week after a Holyrood by-election in which the Tories came fourth, well behind Reform in third. Meanwhile an opinion poll has suggested Mr Farage's party could come second in next May's Holyrood election.
BBC News
6 days ago
- Business
- BBC News
Kemi Badenoch calls for end to windfall tax on oil and gas companies
Conservative leader Kemi Badenoch has called for an end to the windfall tax on oil and gas companies and said new licenses should be issued for drilling in the North the Scottish Conservative party conference in Edinburgh, Badenoch said the tax - known as Energy Profits Levy - should be scrapped before its current 2030 levy was brought in by the previous Conservative UK government but Badenoch said her party had got this Tory leader also claimed that Scotland had "declined" under left wing parties and that the SNP had wasted millions on "independence propaganda". The Energy Profits Levy was introduced in May 2022 after oil and gas companies recorded skyrocketing profits due to a sharp rise in energy has since been both extended and increased, with the current scheme due to end in 2030. The oil and gas sector says the windfall tax is holding back told the Scottish Conservative conference that as part of renewing her party she would be "standing up for our oil and gas".She claimed the windfall tax on the sector is wrong as "for months there has been no windfall to tax".The Tory leader said: "The strikes overnight in the Middle East remind us of how vital it is that we can rely on our own energy security, our own natural resources."Badenoch said Labour's extension of the tax is "killing the oil and gas industry".To applause from the conference, she said a Tory government would "scrap the ban on new licences". Scottish Conservatives leader Russell Findlay earlier said it would be a "complete act of national self-harm" not to continue drilling for oil and gas in the North Sea. He told the BBC's Good Morning Scotland programme: "We are the party who completely support the North Sea oil and gas industry."The SNP in Edinburgh are completely hostile to any form of new exploration, and it's exactly the same with Sir Keir Starmer and Ed Miliband in London."They want to leave this oil and gas in the North Sea and import oil and gas from further afield. It makes absolutely no sense." 'Out of touch' Responding to Badenoch, Simon Francis of the End Fuel Poverty Coalition said her comments were "out of touch", adding: "Even with the windfall tax in place, the energy industry made over £115bn in profits in 2024 alone."Meanwhile, average household energy bills remain hundreds and hundreds of pounds higher than they were before the energy crisis started."SNP MSP Kevin Stewart said: "The Tories wrecked our economy, presided over soaring household bills and ripped Scotland from the EU against our will."Dame Jackie Baillie, the deputy leader of Scottish Labour, claimed the Tories are on the side of oil and gas companies "rather than working Scots".
The Independent
7 days ago
- Business
- The Independent
Kemi Badenoch to call for end to energy windfall tax and oil licence ban
Tory leader Kemi Badenoch is poised to advocate for the end of the windfall tax on oil and gas firms and the ban on new licences in a major speech Initially established by the prior Conservative administration but extended upon Labour's ascent to power, the energy profits levy was intended to finance initiatives aimed at reducing household expenses. However, the policy has faced criticism from within the industry. Addressing the Scottish Conservative conference in Edinburgh on Friday, Ms Badenoch is anticipated to champion the oil and gas sector, accusing the UK Government of "killing" it. She is expected to assert that "renewing our party and our country means standing up for our oil and gas industry". She will add: 'When the oil and gas windfall tax, the energy profits levy, was brought in, the oil price was near a historic high, at the exact time as energy bills for the British people were sky-rocketing. 'But there is no longer a windfall to tax. It has long gone. And the longer this regressive tax on one of our most successful industries remains, the more damaging it becomes. 'Labour have extended and increased this tax. They are killing this industry.' If the measure remains in place to 2030 as intended, Mrs Badenoch will say 'there will be no industry left to tax'. She will add: 'So, today, I say enough. Labour must remove the energy profits levy. Labour must speed up the process of replacing it with a system that rewards success and incentivises investment. 'Because we shouldn't have this energy profits levy at all. 'We must scrap the ban on new licences. 'We must overturn the ban on supporting oil and gas technology exports. 'And we must champion our own industry. 'We must let this great British, great Scottish industry thrive, grow and create jobs – ensuring our energy security for generations to come, driving growth and making this country richer in the process.' Mrs Badenoch will address her first Scottish party conference as leader on Friday while her counterpart north of the border Russell Findlay will deliver his inaugural address on Saturday. Responding to Mrs Badenoch, Simon Francis of the End Fuel Poverty Coalition said her comments were 'out of touch', adding: 'Even with the windfall tax in place, the energy industry made over £115 billion in profits in 2024 alone. 'Meanwhile, average household energy bills remain hundreds and hundreds of pounds higher than they were before the energy crisis started. 'While the Government is right to be consulting on reform of the windfall tax, maintaining a profits levy could help fund home upgrades and a social tariff which would bring down energy bills for the most vulnerable in society.' SNP MSP Kevin Stewart said: 'The Tories wrecked our economy, presided over soaring household bills and ripped Scotland from the EU against our will. 'And now they're lurching further to the right as they haemorrhage votes to Nigel Farage. 'This weekend will be an important reminder of how Westminster has failed Scotland. Only the SNP is offering hope and a brighter future as an independent nation.' Scottish Labour deputy leader Jackie Baillie said: 'While the Tories and SNP let energy workers down by failing to plan for the future, Scottish Labour is committed to taking action towards reaching net zero, creating jobs and cutting energy bills. 'The Tories are on the side of oil and gas giants rather than working Scots, but Scottish Labour will work with the UK Government and use devolved powers to deliver a just transition for the industry. 'With Kemi Badenoch desperately attempting to rally the few remaining Scottish Tories, it seems like it won't be long until they can fit all of their MSPs in a single taxi.'
The Independent
7 days ago
- Business
- The Independent
Badenoch to call for end to oil and gas windfall tax and ban on new licences
Tory leader Kemi Badenoch is set to call for an end to the windfall tax on oil and gas companies and the ban on new licences. The energy profits levy was put in place under the previous Conservative government but extended when Labour entered power. Designed to fund interventions to bring down household bills, the policy has been criticised by those in the industry. Speaking at the Scottish Conservative conference in Edinburgh on Friday, Mrs Badenoch is expected to tout the oil and gas sector, accusing the UK Government of 'killing' it, claiming 'renewing our party and our country means standing up for our oil and gas industry'. She will add: 'When the oil and gas windfall tax, the energy profits levy, was brought in, the oil price was near a historic high, at the exact time as energy bills for the British people were sky-rocketing. 'But there is no longer a windfall to tax. It has long gone. And the longer this regressive tax on one of our most successful industries remains, the more damaging it becomes. 'Labour have extended and increased this tax. They are killing this industry.' If the measure remains in place to 2030 as intended, Mrs Badenoch will say 'there will be no industry left to tax'. She will add: 'So, today, I say enough. Labour must remove the energy profits levy. Labour must speed up the process of replacing it with a system that rewards success and incentivises investment. 'Because we shouldn't have this energy profits levy at all. 'We must scrap the ban on new licences. 'We must overturn the ban on supporting oil and gas technology exports. 'And we must champion our own industry. 'We must let this great British, great Scottish industry thrive, grow and create jobs – ensuring our energy security for generations to come, driving growth and making this country richer in the process.' Mrs Badenoch will address her first Scottish party conference as leader on Friday while her counterpart north of the border Russell Findlay will deliver his inaugural address on Saturday. Responding to Mrs Badenoch, Simon Francis of the End Fuel Poverty Coalition said her comments were 'out of touch', adding: 'Even with the windfall tax in place, the energy industry made over £115 billion in profits in 2024 alone. 'Meanwhile, average household energy bills remain hundreds and hundreds of pounds higher than they were before the energy crisis started. 'While the Government is right to be consulting on reform of the windfall tax, maintaining a profits levy could help fund home upgrades and a social tariff which would bring down energy bills for the most vulnerable in society.' SNP MSP Kevin Stewart said: 'The Tories wrecked our economy, presided over soaring household bills and ripped Scotland from the EU against our will. 'And now they're lurching further to the right as they haemorrhage votes to Nigel Farage. 'This weekend will be an important reminder of how Westminster has failed Scotland. Only the SNP is offering hope and a brighter future as an independent nation.' Scottish Labour deputy leader Jackie Baillie said: 'While the Tories and SNP let energy workers down by failing to plan for the future, Scottish Labour is committed to taking action towards reaching net zero, creating jobs and cutting energy bills. 'The Tories are on the side of oil and gas giants rather than working Scots, but Scottish Labour will work with the UK Government and use devolved powers to deliver a just transition for the industry. 'With Kemi Badenoch desperately attempting to rally the few remaining Scottish Tories, it seems like it won't be long until they can fit all of their MSPs in a single taxi.'
