PRESSURE is piling on PM Liz Truss to increase a windfall tax on fossil fuel giants after the EU announced plans for a tougher levy on their record-busting profits.
Under plans announced by the bloc on Wednesday, fossil fuel extractors could be required to make a “solidarity contribution” covering 33 per cent of their taxable surplus profits for the 2022 fiscal year.
Ms Truss has ruled out extending the 25 per cent levy imposed on British-based firms last year.
The measure was branded a “sticking plaster” solution by campaigners, who pointed out a loophole allowing new investment to be offset against profits would undermine it.
The EU’s plans to extend its own levy, which it says will help raise €140 billion (£121bn), has prompted renewed calls for the PM and Chancellor Kwasi Kwarteng to rethink their refusal to increase windfall tax.
Greenpeace UK chief scientist Dr Doug Parr said: “As the European nation most vulnerable to the profiteering of the gas companies, Britain would benefit most from this kind of windfall tax, so it’s unfortunate that we’re the one European nation that decided government intervention should protect fossil fuel profits, instead of using them to help bill-payers.”
Climate group Uplift, which is part of the Warm this Winter coalition, said the EU’s plans “shine a harsh light” on Ms Truss’s decision to rule out further windfall tax.
“Instead, Truss is doing the industry’s bidding: doubling down on North Sea drilling and promising new licensing, thereby ensuring we stay hooked on expensive oil and gas for longer,” Uplift director Tessa Khan said.
“She may be ideologically opposed to windfall taxes, but soaring fuel poverty rates in the UK demand fresh thinking. The EU’s move will add yet more pressure on her government to claw back some of the oil and gas industry’s obscene UK profits.”
A Friends of the Earth spokesperson said: “It’s astonishing that the oil and gas giants fuelling the cost of living and climate crises are posting record excess profits while millions of people are struggling with sky high energy bills.
“The government should introduce a much tougher windfall tax and close the loophole that encourages more investment in fossil fuels.”
Announcing the plans on Wednesday, EU official Frans Timmermans said the cap would “bring solidarity from energy companies with abnormally high profits towards their struggling customers.”
