The Conservative Party/Government

inbetween said:
It hasn't really got anything to do with future profits or investment. If they announced a windfall tax then what would really happen is the share price of these companies would be hit. The share price never does well by reinvestment or even profit, it's more often very closely tied to the expected dividend, a suggested dividend can go up or down usually by profit but that's not the only factor.

Don't underestimate the power of hedge funds and the like who invest and rely on huge dividends from these companies. It's very likely too that your pension fund is invested in these kind of dividends so it does have some payback but it only really helps people who have serious money tucked away.

Sunak will know this very well and he will happily resist such taxes because he used to work for a hedge fund.... The one thing Sunak has managed to do is fool everyone into thinking he's some millennial moderniser hipster but the reality is unfortunately he's just a banker.
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Its got nothing to do with any of that. It’s about retrospectively apply new tax rules and how that brings into disrepute UK plc - That’s not to say there isn’t a time and place for this type of retrospective taxation - I was in favour of a windfall tax (excess profits) for firms who made a killing with selling PPE to the NHS and care homes during covid as this profit was exclusively funded by the tax payer through government procurement.

A windfall tax is attractive with many because someone else is footing the bill. It’s lazy and disingenuous politics - the real reason we are here because we allow companies to prop up profits through working tax credits and long held short term policies on energy security. Start talking about addressing those structural imbalances and issues and I’ll vote for you - sadly it’s all about sound bites and grabbing headlines for 24 hours these days
 
bluethrunthru said:
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Many employers have taken advantage of the reduced requirement for office space due to the investment in IT infrastructure to enable people to work effectively from home. It's really no surprise that two years down the line there are less desks than people to occupy them. You'd think the government would be aware of that. Unfortunately rather than leave it to local management to manage it properly, they are issuing edicts for people to go back into the office. Anyone would think that they had an interest in commercial property owners being able to charge a premium for office space rental.
 
metalblue said:
Its got nothing to do with any of that. It’s about retrospectively apply new tax rules and how that brings into disrepute UK plc - That’s not to say there isn’t a time and place for this type of retrospective taxation - I was in favour of a windfall tax (excess profits) for firms who made a killing with selling PPE to the NHS and care homes during covid as this profit was exclusively funded by the tax payer through government procurement.

A windfall tax is attractive with many because someone else is footing the bill. It’s lazy and disingenuous politics - the real reason we are here because we allow companies to prop up profits through working tax credits and long held short term policies on energy security. Start talking about addressing those structural imbalances and issues and I’ll vote for you - sadly it’s all about sound bites and grabbing headlines for 24 hours these days
Click to expand...

Why is profiteering from covid different from profiteering from the war in Ukraine?

Italy and Spain aren't exactly communist utopias.

www.theguardian.com

Windfall taxes and an ‘anti-Putin shield’: how Europe is tackling energy crisis

Analysis: As UK resists calls for a one-off tax on oil and gas operators, other nations have acted swiftly
www.theguardian.com www.theguardian.com
 
metalblue said:
Its got nothing to do with any of that. It’s about retrospectively apply new tax rules and how that brings into disrepute UK plc - That’s not to say there isn’t a time and place for this type of retrospective taxation - I was in favour of a windfall tax (excess profits) for firms who made a killing with selling PPE to the NHS and care homes during covid as this profit was exclusively funded by the tax payer through government procurement.

A windfall tax is attractive with many because someone else is footing the bill. It’s lazy and disingenuous politics - the real reason we are here because we allow companies to prop up profits through working tax credits and long held short term policies on energy security. Start talking about addressing those structural imbalances and issues and I’ll vote for you - sadly it’s all about sound bites and grabbing headlines for 24 hours these days
Click to expand...
At the moment the governments argument to not implement a windfall tax is because it will impact investment. But why will it? Borrowing is still cheap, these companies have ample access to cashflow and not a single public company ever reinvests its profit because they give profit to shareholders as dividends and then they borrow money for investment. So what they're really arguing to protect is the impact on share prices and dividends.

I'm in two minds about a windfall tax, not because I agree with these companies making tons of money but because I think the government will just waste it and so what was the point? I'd much rather force companies to reward employees with profit bonuses or to just pay them more. The company I work for made £2.2bn last year in profit, they've offered us 2.5% this year and it took the unions threatening action to get us to 3.5% which still isn't enough and we're lucky to get anything compared to others!

What we really need, especially in energy, is a proper regulator that monitors gas prices and is dynamic enough to step in to change the price cap where required. We don't have that, instead we have a regulator that responds to daily price fluctuations on an annual basis, it's pathetic and not fit for purpose. If gas prices fall tomorrow by 99% then there is nothing to stop the energy companies from charging me and you yesterday's prices for it. The same has happened to oil, petrol prices are still amongst the highest ever but oil prices fell months ago.

We also have dickheads running our financial system, prime example is that guy at the BoE who actually said that we should reject pay rises to contain inflation. It's literally unbelievable and just shows how completely out of touch the ruling class is who only exist to protect the club they're far too invested in.
 
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inbetween said:
At the moment the governments argument to not implement a windfall tax is because it will impact investment. But why will it? Borrowing is still cheap, these companies have ample access to cashflow and not a single public company ever reinvests its profit because they give profit to shareholders as dividends and then they borrow money for investment. So what they're really arguing to protect is the impact on share prices and dividends.

I'm in two minds about a windfall tax, not because I agree with these companies making tons of money but because I think the government will just waste it and so what was the point? I'd much rather force companies to reward employees with profit bonuses or to just pay them more. The company I work for made £2.2bn last year in profit, they've offered us 2.5% this year and it took the unions threatening action to get us to 3.5% which still isn't enough and we're lucky to get anything compared to others!

What we really need, especially in energy, is a proper regulator that monitors gas prices and is dynamic enough to step in to change the price cap where required. We don't have that, instead we have a regulator that responds to daily price fluctuations on an annual basis, it's pathetic and not fit for purpose. If gas prices fall tomorrow by 99% then there is nothing to stop the energy companies from charging me and you yesterday's prices for it. The same has happened to oil, petrol prices are still amongst the highest ever but oil prices fell months ago.

We also have dickheads running our financial system, prime example is that guy at the BoE who actually said that we should reject pay rises to contain inflation. It's literally unbelievable and just shows how completely out of touch the ruling class is who only exist to protect the club they're far too invested in.
Click to expand...
What we really need is no private utility companies for life's essentials.
 
Fode N The Hole said:
Why is profiteering from covid different from profiteering from the war in Ukraine?

Italy and Spain aren't exactly communist utopias.

www.theguardian.com

Windfall taxes and an ‘anti-Putin shield’: how Europe is tackling energy crisis

Analysis: As UK resists calls for a one-off tax on oil and gas operators, other nations have acted swiftly
www.theguardian.com www.theguardian.com
Click to expand...

Nor are Italy and Spain renowned for their oil/gas production. Is there a major producing nation that has introduced a windfall tax.l?

The energy crisis hit long before Russia invade Ukraine they were a result of exiting lockdowns - particularly in Asia. In 2020 oil was actually trading at a negative price - unbelievably they would pay you to take the oil. Shell (as an example) lost $21bn in 2020, BP lost a touch over $20bn. In fact I’d suspect if you averaged out profits 2020-2022 they’ll not be far off 2016-2019. So they aren’t really making excess profits in that sense - although this is an exceptional start to the year and we have a long way to go yet. For reference the oil “war premium” is priced in around $20 a barrel.

Your wider question to what makes excess profits ok for one different to excess profits for another. It’s a fair question. It boils down to a question of fairness, shell/bp/total have been in the oil/gas game for years - through the highs and lows - for PPE we had companies making millions who had never touched PPE previously. They were opportunists, and can have little complaint being hit with an opportunist tax - which is exactly what a windfall tax is. Tax should always have a sense of fairness at its core, although that’s not always the case (eg tax on tampons).

If a fair case can be made to tax these companies more then I’m all ears. But just saying well they’ve earned a tonne of cash in Q1 2022 and we want a part isn’t really a fair case. It may be a worthy cause but there are many worthy causes out there - and these companies are free to make huge donations and create a hardship fund or whatever they want to call it should they so wish (which I would do if I was CEO of one of these btw)
 
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