An increased windfall energy tax may be back on the agenda with energy bosses set for talks with the government on how they aim to tackle soaring bills.
Education secretary James Cleverly told Sky News that chancellor Nadhim Zahawi and business secretary Kwasi Kwarteng will meet the leaders of energy companies, such as BP, Shell and Centrica, as analysts now forecast energy bills to break £4,500 next year.
Millions of UK homes are already in debt over their energy bills, with £1.3bn owed before they are set to soar even higher, according to analysts at Uswitch.
Cleverly, quoted in Sky News, said “the chancellor and business secretary have hauled in leaders of the energy companies to hold them to account, to discuss with them what they are going to do with these unexpected, unplanned, unprecedented profits that they have been making.”
That being said, any decision regarding a levy on the energy and oil and gas businesses is unlikely to be confirmed until a new Prime Minister is announced next month.
The Education Secretary did not deny that households and businesses in the UK could face blackouts this winter but did add the country is in a “better position than many in terms of our domestic energy production.”
Energy giants Shell, BP, and British Gas Owner Centrica faced widespread anger after they all announced a set of bumper profits in recent weeks.
Shell announced a 154% increase in revenue to US$18bn in its second-quarter results amid the soaring fuel prices and announced alongside plans to reinvest some of the earnings in new energy supplies in a US$6bn share buyback.
BP said it doubled its cash flow in its second quarter to US$10.8bn while ‘surplus’ cash flow ballooned year on year to US$6.6bn compared to US$695mln.
Centrica also increased full-year underlying earnings by 143%, reinstating its dividend for the first time since the pandemic.
British Gas’ owner remained confident in the outlook for the year after it reported an adjusted EBITDA of £1.66bn for the first six months of the year, although it did report a statutory operating loss due to costly derivative energy contracts.