Conservatives failing to count cost of windfall tax loophole

November 16, 2022 11:46 AM
Originally published by East Midlands Liberal Democrats

The Liberal Democrats have accused the Conservatives of letting oil and gas giants off the hook, as a Conservative minister admitted the government is not even checking how much tax is being avoided through the glaring loophole in its windfall tax.

The Liberal Democrats are urging Jeremy Hunt to use this week's Autumn Statement to close the loophole and raise millions more pounds to help struggling families and protect vital public services this winter.

Shell admitted earlier this month that it has paid zero windfall tax despite making record profits from soaring gas prices, while BP will pay just £700m on £7.1bn in profits. Both oil and gas giants have profited from the government's investment allowance, a loophole that gives companies 91p back in tax for every £1 invested in fossil fuel extraction.

However, in response to a series of parliamentary questions tabled by the Liberal Democrats, Conservative Treasury Minister James Cartlidge admitted that "no estimate has been made to date of the amount of tax revenue that has been offset by the Investment Allowance". He added that the government is not collecting monthly figures on how much oil and gas companies are avoiding in tax through the loophole.

The minister also appeared to suggest the windfall tax has not raised any money at all yet, instead saying that "the first payments are expected later this year."

Liberal Democrat Treasury Spokesperson Sarah Olney MP said:

"The Conservatives' botched windfall tax has already seen millions of pounds of taxes poured down the drain. It's staggeringly incompetent that they won't even check how much more is set to be lost.

"People are struggling to heat their homes, pay their mortgage or put food on the table, while the NHS is on its knees. But the Conservatives' want to make the rest of us pay for their mess, while letting oil and gas giants off the hook.

"Jeremy Hunt must close this glaring loophole before more vital tax revenue is lost. It's time to introduce a proper windfall tax so we can support struggling families and our schools and hospitals this winter."