The call for a windfall tax on oil and gas companies, whose profits have rocketed over the last year, has now become something of a clamour. Originally proposed by Labour a month ago, the idea has been taken up by both the Liberal Democrats and Greens, and even some Conservative MPs. Jeremy Kyle’s conversion to the cause by the climate activist Tessa Khan has gone viral.
The basic idea of a windfall tax is very simple. Over the past year the huge rise in global oil and gas prices has provided oil and gas companies with vastly expanded profits. BP has just announced 2021 profits of £9.5bn (compared with a loss of £4.2bn the year before) and Shell £14bn (a four-fold increase). If these additional profits were taxed, the revenues could be used to help reduce energy bills for hard-pressed consumers.
