UK announces exceptional tax to energy giants to help families

The British government announced on Thursday (26) a package of 15 billion pounds (US$ 18 billion, R$ 90 billion) to help the most disadvantaged families to face the crisis of the cost of living, partially financed by a exceptional tax on energy giants.

Under the effect of the economic reactivation after the confinements and the surge in energy prices due to the Ukrainian War, the United Kingdom has recorded a record inflation in the last 40 years and 9% in April and which is expected to exceed 10% by the end of the year. .

At the same time, soaring oil and gas prices have boosted the profits of giants like BP and Shell considerably.

In this context, the Labor opposition has been asking Boris Johnson’s Conservative Executive for weeks to apply an exceptional tax to the sector to help families face energy bills.

After rising almost 55% in April, the legal ceiling for tariffs is expected to rise again in October and the British electricity authority, Ofgem, warned on Tuesday (24) that it would be around 42%, that is, 800 pounds ($1,000, 930 euros, R$4,850) more per year per family.

However, Johnson and his ministers have opposed the application of this exceptional tax, arguing, like the energy giants themselves, that it could hamper investment in renewable energy and the transition to carbon neutrality.

They argued that the government has already allocated 22 billion pounds (R$133.3 billion) to help the most disadvantaged deal with inflation, an amount that unions and anti-poverty organizations denounce as insufficient.

180º turn

However, this Thursday, a day after the publication of a report that blamed the British authorities for the “partygate” – the celebration of numerous illegal parties in government facilities during the confinements – Johnson, who refuses to resign, gave a 180 degree turn.

In a speech before Parliament, Finance Minister Rishi Sunak assured that this aid package will allow the most disadvantaged Britons “to feel that the weight of inflation is decreasing”.

“Nearly one in eight of the UK’s most vulnerable families will receive at least £1,200 this year, including a one-time cost-of-living allowance of £650, an increase in 400 pounds (R$2,425) and a doubling of the discount on electricity bills” in October, his ministry said.

All families, regardless of their income, will receive a grant of £400.

These measures will be financed in part with a “temporary 25% tax on the energy profits of oil and gas companies, which reflects their extraordinary profits”, explained the Treasury, estimating that it will raise about 5 billion pounds (R$ 30.3 billion). billion) next year.

In return, energy companies will benefit from a nearly doubled tax break on their investments. “The more a company invests, the less taxes it pays,” Sunak told deputies.

mere “patch”

Stephen Barclay, a senior government official, denied on Thursday, in statements to the Sky News channel, that the timing of these announcements was intended to silence the “partygate” scandal and assured that the Treasury made them coincide with the announcements of the Ofgem.

The move was welcomed by NGOs such as Oxfam, whose boss Sam Nadel said it was “fair that fossil fuel companies making excessive profits are asked to contribute more at a time when so many families in the UK have run out of options”.

According to a YouGov poll of 1,755 adults, one in five Britons (22%) say they struggle or cannot survive, up 12 percentage points from May 2021.

However, Ami McCarthy of Greenpeace called the exceptional tax a mere “patch”, criticizing that energy companies are taxed on only 25% of their profits instead of 70%, which “could have been used to provide the to families and also improve their homes to ensure they use and waste less energy and keep bills low for years to come.”