Date: 2025-04-05 Page is: DBtxt003.php txt00022364
EXCESS PROFITS
ROOT CAUSE OF 2022 INFLATION
'Grotesque': BP Enjoys Largest Profits in Decade as Boris Johnson Rejects Windfall Tax ... 'Refusing a windfall tax is a political choice which shows the Tories aren't on the side of the British people.'
ROOT CAUSE OF 2022 INFLATION
'Grotesque': BP Enjoys Largest Profits in Decade as Boris Johnson Rejects Windfall Tax ... 'Refusing a windfall tax is a political choice which shows the Tories aren't on the side of the British people.'
Greenpeace activists sit chained into oil barrels as they protest outside the headquarters of oil giant BP in London on February 5, 2020, on the day that the company's new CEO, Bernard Looney, was set to take up his role. (Photo: Daniel Leal/AFP via Getty Images)
Original article: https://www.commondreams.org/news/2022/05/03/grotesque-bp-enjoys-largest-profits-decade-boris-johnson-rejects-windfall-tax
Burgess COMMENTARY
The idea that a corporate organization has to maximize profit and the benefit to the organization's owners has been front and center for all my adult lifetime. Milton Friedman was one of the academics that argues this case with a lot of support from wealthy investors.
For the last 40 years productivity and profits have increased at record levels mainly because of technology. During this same time period there have been seismic changes in the remuneration and wealth of workers.
There have also been big changes in the way politicians behave. Money in politics is now a massive problem that makes a nonsense of democratic (small d) ideals. It is more $1 one vote than 1 person, one vote.
Laws were passed in the 19th century to stop corporate entities lying to their investors, and these rules still apply even though they are really not very 'fit-for-purpose' in the 21st century. I qualified as a Chartered Accountant in the 1960s in London and have been a staunch supporter of excellence in accounting and financial reporting while at the same time absolutely appalled at the way in which social and environmental impacts which are perhaps even more important than financial performance are to all extents and purposes totally ignored.
It is laughable how little meaningful information about social impact and environmental impact can be learned from the 'sustainability' reporting and other similar initiatives of large public corporate organizations. Worse, some very large privately owned corporate organizations get to do whatever suits them no matter how bad it is for society and for the environment.
We pay far too little attention to the lobbying that goes on around politicians whether it is in Washington, the Nation's capital or in the State capitals. Money in politics and aggresive lobbying may be good for corporate owners and top executives, but not at all good for the country as a whole.
There is a need for masive reform in the way economic actors behave. The word 'transparency' has been used for decades, but the reality is that most big powerful companies are far less transparent today than they were fifty years ago. Many of the issues around metrics have not been resolved over many decades, but have become worse as layer upon layer of more information has confused rather than clarified. To add insult to injury, the work of the major business schools in training students to optimize for financial results with little or no concern for social or environmental damage.
There is a foundation to build on ... but little movement yet to do what is needed. My work with TrueValueMetrics.org has potential but I am getting older and don't have the level of energy needed to do everything that is needed. I will continue to try ........
Peter Burgess
'Refusing a windfall tax is a political choice which shows the Tories aren't on the side of the British people.'
Written by ANDREA GERMANOS
May 3, 2022
British Prime Minister Boris Johnson's conservative government came under fire Tuesday for its refusal to impose a windfall tax on oil and gas giants after BP posted its highest quarterly earnings in more than a decade.
The London-headquartered energy company announced an underlying replacement cost profit of $6.2 billion for the first three months of 2022, well above the $2.6 billion it posted the same period last year and beating the $4.5 billion expected by market analysts.
BP attributed the profit to 'exceptional oil and gas trading, higher oil realizations, and a stronger refining result,' and announced plans to buy back an additional $2.5 billion in shares.
The company also said it wrote its $25 billion stake in Russia to zero. The Guardian reported last week:
Looked at one way, that’s a lot of money. Looked at another, it’s practically chicken feed for a company that absorbed £50bn of costs from its 2010 Deepwater Horizon oil spill and lived to tell the tale. Moreover, the loss might have been more painful if it weren't for the fact that oil companies have been making out like bandits due to sky-high oil and gas prices.
While Chancellor of the Exchequer Rishi Sunak suggested last week that a windfall tax on energy companies could happen if the firms 'are not going to make... investments in our country and energy security,' business secretary Kwasi Kwarteng made clear that he's 'never been a supporter of windfall taxes,' declaring, 'I think it discourages investment.'
In an interview following BP's posting, the prime minister doubled down on that assertion.
'Good Morning Britain' host Susanna Reid pressed Johnson about his refusal to support a windfall tax on energy companies to help U.K. households facing soaring prices for food, petrol, and other necessities.
'If you put a windfall tax on the energy companies,' the prime minister claimed, 'what that means is that you discourage them from making the investments that we want to see that will, in the end, keep energy prices lower for everybody.'
But Ed Miliband, the opposition Labour Party's climate secretary and an MP for Doncaster North, took issue with Johnson's assertion.
The 'government claims that the massive profits windfall is going to investment,' Miliband tweeted. 'BP tells us in black and white that's wrong—they say 60% is going to share buybacks.'
'Refusing a windfall tax is a political choice which shows the Tories aren't on the side of the British people,' he added.
Green MP for Brighton Pavilion Caroline Lucas similarly criticized Johnson's rejection of a windfall tax.
'Soaring gas prices mean BP profits of $6.2bn in first three months of 2022, while millions struggle to make ends meet,' she tweeted.
Lucas added that the government's 'refusal to levy a windfall tax on obscene profits and support those with huge energy bills shows whose side they're on—it's grotesque.'
Criticism also flew in from climate campaigners including Friends of the Earth.
'It's astonishing,' said FOE energy campaigner Sana Yusuf, 'that companies like BP are allowed to rake in huge profits while people up and down the country are struggling with soaring energy bills.'
She also urged Sunak introduce a windfall tax that funds investment in a nationwide energy efficiency program.
'A street-by-street insulation program—targeting the hardest hit first—would lower bills, help manage energy demand, and improve energy security,' she said. 'With profits like this,' she added, 'it would be short-sighted to do anything less.'
Although calls from progressive lawmakers and groups in the U.S. for a windfall tax on oil and gas companies have gone unheeded, Italy this week increased its windfall tax on profits on energy firms from 10% to 25%.
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