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Tuesday, 13 February, 2001, 13:44 GMT
Call for windfall tax on oil firms
Gordon Brown
Gordon Brown hinted at a possible levy last year
The government is coming under pressure to impose a windfall tax on oil companies.

Demands for the tax followed hard on the heels of BP's announcement on Tuesday of record profits of 9.75bn and amid continuing anger at the cost of petrol at the pumps.

The government should step in and impose a windfall levy on the oil companies

Lindsay Hoyle MP
Labour MPs, describing the profits as "extreme", have backed calls from trade unions for Chancellor Gordon Brown to impose a levy on oil companies in next month's Budget.

Mr Brown ruled out such a move in his pre-Budget report last November.

He said then: "While it has been put to me that North Sea oil companies, earning higher profits from higher oil prices, should be subject to special taxes, I can tell the House that I am determined not to make short-term decisions based on short-term factors.

"The key issue is the level of long-term investment in the North Sea. And this will be the approach that will guide budget decisions in future."

'Extreme profits'

Labour backbencher Lindsay Hoyle has tabled a motion in the Commons calling on the government to "step in" and ensure oil companies' profits were not being made at a cost to consumers.

The Chorley MP said BP's profits were "extreme" and said that motorists were being "ripped off".

Lindsay Hoyle
Mr Hoyle has tabled a motion in the Commons
"The price of petrol and diesel continues to remain high while the oil companies continue to make record profits," he said.

"Clearly consumers in Chorley and across the country are being ripped off.

"People quite rightly showed their opposition to the level of duty of fuel last year.

"In fairness to the government, they listened to people's views and acted accordingly with the chancellor announcing cuts in duty on diesel and petrol in the pre-Budget report.

"It is now time that the oil companies listened to people's views and reduced fuel prices."

Windfall tax

Mr Hoyle said the proceeds of a windfall tax could be passed to motorists and used to fund new infrastructure.

"It is disgusting to learn that companies such as BP make a profit of 350 per second and I believe that the government should step in and impose a windfall levy on the oil companies.

"We witnessed the effectiveness of a windfall levy on the privatised utilities which covered the cost of the New Deal project, resulting in an extra one million jobs being created. I believe this can be again.

The oil companies have become the highway robbers of the 21st century

John Edmonds, GMB
"This time the revenue gained from the levy could be passed directly to the motorist through further cuts in duty and a package of measures to help motorists including further investment in our transport infrastructure."

GMB general secretary John Edmonds said: "These figures are an obscenity.

The oil companies have become the highway robbers of the 21st century, with BP claiming the mantle of a modern day Dick Turpin.

"They cannot be allowed to continue to bleed motorists and the taxpayer dry.

"They should voluntarily start to reduce their grotesque profit margins or else the government should step in and introduce a windfall levy without delay."

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See also:

13 Feb 01 | Business
BP reports record 9.75bn profit
08 Feb 01 | Business
Shell reports record 9bn profit
13 Feb 01 | Business
Oil firms: Excessive profits?
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