Cayman Islands, Caribbeanand International News
Monday, May 20, 2024

Windfall tax 'damaging' for net zero plans and energy security, businesses say

Windfall tax 'damaging' for net zero plans and energy security, businesses say

The Confederation of British Industry says the chancellor's windfall tax will hurt the UK's net zero ambitions - but climate groups disagree.

The windfall tax announced by the chancellor will be "damaging" for the UK's net zero plans and energy security, the Confederation of British Industry (CBI) has said, while BP has signalled the measure is more harsh than it expected.

Rain Newton-Smith, CBI chief economist, said the tax "sends the wrong signal to the whole sector at the wrong time", pointing to a "backdrop of rising business taxation".

Chancellor Rishi Sunak said oil and gas firms will pay a 25% levy on profits, which will be phased out when energy prices return to normal - but companies will get tax breaks worth 91p for every £1 invested. The funding will be used to help families with soaring energy bills.

Oil and gas companies are being targeted because they have enjoyed bumper profits as a result of soaring energy prices.

However, such firms also suffered at the height of the COVID crisis as demand for oil, and therefore prices, slumped.

Ms Newton-Smith said the government needs to work with businesses on a "genuine" plan to increase investment and "get growth going again, particularly in areas like energy efficiency".

"Despite the investment incentive, the open-ended nature of the energy profits levy - and the potential to bring electricity generation into scope - will be damaging to investment needed for energy security and net zero ambitions," she said.

BP, which had announced earlier this month an £18bn investment over the next eight years to bolster domestic energy security, gave a guarded response to the measure.

A spokesperson said: "We know just how difficult things are for people across the UK right now and recognise the government's need to take action.

"As we have said before, we see many opportunities to invest in the UK, into energy security for today and into the energy transition for tomorrow.

"Today's announcement is not for a one-off tax - it is a multi-year proposal. Naturally we will now need to look at the impact of both the new levy and the tax relief on our North Sea investment plans."

Shell said the tax relief on investments is a "critical principle in the new levy".

"We have consistently emphasised the importance of a stable environment for long term investment," a spokesperson said.

"This is fundamental to our aim to invest between £20bn and £25bn in the UK in the next decade, mostly in low and zero-carbon products and services, with a significant amount also focused on ensuring security of energy supply for the UK."

Sam Alvis, head of economy at climate think tank Green Alliance, said the windfall tax is the "vital thing to do to help households".

"It isn't the tax that will hurt net zero, but potentially the investment allowance that comes with it," he told Sky News.

"There is nothing to prevent that investment going to volatile oil and gas that are largely responsible for driving up people's energy bills.

"The chancellor should be using tax reliefs and public investment to rapidly expand the cheap and secure renewables we need to solve this crisis."

'The chancellor has failed'

Green groups also said Mr Sunak needed to go further to address underlying issues fuelling growing energy bills.

Shaun Spiers, executive director at Green Alliance, said: "Unless the transition from expensive gas to cheap renewables and energy efficient homes is accelerated, the government will be continually forced into emergency fixes."

Ed Matthew, campaign director at independent climate change think tank E3G, agreed, saying: "The chancellor has failed to fix the underlying crisis."

He said the windfall tax should have been partly used to improve home insulation, which would make homes warmer and reduce energy bills by as much as 50%.

He said the UK has the worst insulated homes in western Europe but this cannot be fixed without more government funding, adding: "We will all pay the price for this missed opportunity."


Related Articles

Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner