North Sea oil and gas firms face govt pressure to invest profits into home-grown energy to ‘bring down bills’

Business

North Sea oil and gas companies have come under pressure from the government to invest their profits into accelerating domestic energy production as millions of Britons continue to face soaring energy prices.

Business Secretary Kwasi Kwarteng has written a letter to firms calling for them to provide a clear plan to spend their profits on improving production in the UK.

He has also ordered the industry to set out proposals for clean energy investments in a meeting that is due to be held in the coming weeks.

Despite the cost of living crisis continuing to hit Britons, ministers have not been given any fresh funding to ease the pressure on families.

Writing in his letter, Mr Kwarteng argued that home-grown energy production is essential to grow the British economy and “crucially bring down consumer bills in the long-term”.

“In return for the UK government’s ongoing support for the sector, the prime minister, the chancellor and I want to see a very clear plan from the oil and gas industry to reinvest profits in the North Sea and, importantly, in the clean energy technologies of the future,” he wrote.

However, Labour has criticised the move, saying the letter is “not worth the paper it is written on” for the millions of people facing rising costs.

More on Cost Of Living

Shadow climate change secretary Ed Miliband said the government is “panicking” ahead of financial results due to be published next week, which “will show oil and gas producers making soaring profits”.

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PMQs: Labour calls for windfall tax

Read more: Windfall taxes have been tried before – but could such a move backfire?

“After months of opposing the windfall tax tooth and nail, the government is rattled because they are losing the argument,” he added.

A windfall tax is a compulsory financial charge imposed by a government on certain industries that have experienced above-average profits due to economic conditions.

Mr Miliband explained that the “only way to actually make a difference” is for ministers to implement a one-off windfall tax on profits made by oil and gas production companies.

“Families want action to deal with the bills crisis, not a vacuous, insulting piece of political spin,” he said.

Ministers have been resisting imposing the tax, but Chancellor Rishi Sunak opened the door to the move earlier this week.

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