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Calls grow for 'greedy' oil giants to pay windfall tax

David Randall,Jane Merrick
Sunday 01 February 2009 01:00 GMT
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Union leaders and Labour MPs, led by Jon Cruddas, the prominent left-winger, have stepped up their demands for a windfall tax on energy companies in the Budget.

Derek Simpson, the joint general secretary of Unite, said that "greedy" oil giants should be forced to "redistribute" profits. His comments come in the wake of record-breaking profits made by oil giants. Late last week, ExxonMobil announced full-year profits of $45.2bn (£30bn) – the largest ever delivered by an American company. Its rival Chevron made $23.9bn. If the two figures are combined, the companies made profits at a rate of $6m an hour. Royal Dutch Shell earlier posted annual results showing profits for 2008 of $31.4bn. All three reported sharp falls in profitability in the final quarter of the year, as the effect of the recession and the high oil prices earlier in the year began to wane.

Ministers threatened to impose a windfall tax in the pre-Budget report in November unless oil producers signed up to a government package to tackle fuel poverty (defined as spending more than 10 per cent of household income on energy bills). The vast profits have placed the Government under renewed pressure to force companies to make a more substantial contribution.

This week, the left-wing group Compass, which says that the move could raise £6bn, is to launch a Windfall Tax Campaign Toolkit, to be sent to 15,000 supporters urging them to lobby ministers.

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