Oil and gas giants making billions of pounds of extra profits are paying their “fair share of taxation,” a minister insisted Thursday as the Government faced a growing row over how to fund a massive support package to keep energy bills down.
Levelling-up Secretary Simon Clarke was grilled on Sky News over reports that these energy giants, according to the Treasury, are going to rake in £170 billion in excess profits after gas prices soared following Vladimir Putin’s invasion of Ukraine.
“The reality is that if companies are making large profits then of course they will also be paying large amounts in tax to the Exchequer,” he said.
“There is already a windfall tax which was introduced earlier this year.”
He continued: “Critically, it’s worth remembering oil and gas companies pay double the main rate of Corporation Tax, 40p in the Pound compard to 19p as the main rate.
“It’s not as though they don’t pay their fair share of taxation.”
But shadow Treasury minister James Murray said: “Comments like these show how little the Government understands the impact of their own failure
“What’s unfair is always diving first into the pockets of working people.”
The Government is expected to fund a support package to keep down bills, expected to total more than £100 billion, possibly rising to £150 billion, largely by borrowing.
Pressed whether it was right to leave future generations to pick up the bill for the energy package, Mr Clarke added: “I absolutely believe that the State should live within its means whenever possible but you have to also balance what we are seeking to do here for the real economy in the near term against that challenge.
“We are comfortable that this is the right approach.
“Critically, what we cannot do is just allow this situation to play out without a decisive intervention.”
Mr Clarke also confirmed businesses would be in the scope of the intervention that was being announced on Thursday.
Sir Keir Starmer challenged Liz Truss at her first Prime Minister’s Questions on Wednesday over funding for the support package which is expected to keep the typical domestic energy bill down to between around £2,000 and £2,500 until at least January.
The Labour leader said: “The Prime Minister knows that she has no choice but to back an energy price freeze but it won’t be cheap and the real choice, the political choice, is who is going to pay.
“Is she really telling us that she is going to leave these vast excess profits on the table and make working people foot the bill for decades to come?”
Ms Truss responded: “I understand that people across our country are struggling with the cost-of-living and with their energy bills,” she said.
“And that is why I as Prime Minister will take immediate action to help people with the cost of their energy bills and I will be making an announcement to this House on that tomorrow, giving people certainty to make sure that they are able to get through this winter.”
