Reez says energy firms making war profits

Energy firms are making war profits from the surge in oil and gas prices following Russia's invasion of Ukraine, the shadow chancellor has said.

The government passed a windfall tax on profits made from extracting oil and gas in the UK last year to finance a scheme to lower bills.

The Labour party has said it wants to extend the windfall tax further, but there hasn't been a sign of how much.

The energy profits Levy EPL, introduced in May 2022, is set at 35% and takes the rate of oil and gas companies to 75%.

The levy is based on profits made from extracting UK oil and gas, not from other activities, such as refining oil and selling petrol and diesel on forecourts.

Ms Reeves said that there needs to be a proper windfall tax on huge profits the energy giants are making because while they make huge profits, people are paying huge bills.

It's true that those are the windfalls of war, they should be taxed properly to help people with a cost-of-living crisis, she said.

The reason why energy prices haverisen is because of Russia's illegal invasion of Ukraine, which has resulted in a surge in energy prices. And the energy companies have benefited from increased profits on the back of it, and everybody else has been subjected to higher bills.

The company's ingenuity is not a factor in its profits. that money should go into helping families with their energy bills and helping businesses that have also seen their bills go up. Shell posted a net profit of 7.6 billion for the first three months of the year. BP posted a profit of 4 billion in the first quarter of this year.

The vast majority of both companies' earnings are earned abroad and are therefore not covered by the UK's windfall tax.

A windfall tax is used to target firms that benefit from something they were not responsible for.