Oil companies have been announcing huge profits this week. Today Shell reported a £7.6 billion profit in the first quarter of the year. While BP made £4 billion profit.
In a cost of living crisis fuelled by soaring energy costs, these profits are obscene.
I was on GB News on Tuesday calling for a beefed up windfall tax – and an end to the tax loopholes used by oil companies – to claw back some of that profit.
Boom time for the rich
Both Shell and BP are using those profits to reward their shareholders. Firstly by increasing the dividends they pay shareholders. Secondly, by share buybacks. This where a company buys its own shares in the market in order to boost the listed price, further rewarding shareholders.
But it’s not just oil companies. Across the UK many big companies are posting huge profits, as their prices soar. The top 350 companies in the UK have doubled their profit margins since 2019, research from Unite the union found.
Why is this happening? Many companies are using the cover of inflation to push their prices up beyond their increased costs and so making more profit. Unite has dubbed it “greedflation”.
Overall, this means that the ‘flows of wealth’ from ordinary people to the rich are increasing. And this is driving inequality.
Inequality growth in the UK has been put into hyperdrive by this cost of living crisis, as big companies and the rich drain more and more wealth from the rest of us.
We need to act together
It’s never been more urgent that we tackle this inequality. And that means addressing the ballooning wealth of the super rich.
We’re in a cost of living emergency. Those with broadest shoulders must be made to pay more tax to support the country and society that have helped them thrive.
We have developed 6 wealth tax policies that could raise £50 billion a year. This money could be used to help support households struggling in the cost of living crisis – and better fund our NHS.
A lot of this is about fairness. We want to see those with huge wealth taxed at the same rate as those who work.
This would address the hugely unfair situation where those with income from huge wealth often pay less tax than those who work. For example, our prime minister Rishi Sunak paid an effective rate of tax of 22% on his £5 million earnings. This is the same effective tax rate paid by the average nurse.
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