Press release – Tax profiteering corporates to help with the cost of living, says UK civil society

Tax profiteering corporates to help with the cost of living, says UK civil society

26 March, London – 40 Leading UK civil society organisations and unions have called on the Chancellor to levy excess profits taxes on the windfall revenues numerous sectors are predicted to make as a result of the economic fallout from the US-Israeli war on Iran.

The organisations involved – including National Education Union, Tax Justice UK, Greenpeace UK, 38 Degrees, Global Witness, Women’s Budget Group and Patriotic Millionaires UK – have written a joint letter to Keir Starmer and Rachel Reeves urging the government to curb profiteering. They propose the tax revenue is used to provide direct cost of living support, and investment in the long-term resilience of the UK economy to make it less susceptible to fuel price shocks.

The signatories say that the Iran war crisis should be a “turning point for the UK” as “energy bills, fuel costs, and essentials are set to increase in costs for households and businesses already struggling with affordability after years of a cost of living crisis”. The letter goes on to say that “It is not right that extraordinary profits, generated off the backs of ordinary people during periods of crisis, are siphoned off into private hands and corporate bank accounts.” While it also notes that the government’s own cost of living champion has called for measures to prevent profiteering.

Faiza Shaheen, Executive Director of Tax Justice UK who coordinated the letter said:

“Too often UK governments have failed to protect households and small businesses from the profiteering corporates and super-rich individuals who circle around crises like vultures. Spain has already frozen rents, yet our government fails to show urgency. The Chancellor needs to get a grip on the situation to help people already struggling, and show that this will not be yet another crisis where the rich get richer, while everyone else foots the bill.”

New data recently released suggests that North Sea energy firms are already set to make extra profits while banks and mortgage providers will increase revenue as a result of increased mortgage costs. Meanwhile, costs for agricultural inputs have risen extraordinarily, while defense contractors have recently been posting record revenues.

Areeba Hamid, Co-Executive Director of Greenpeace UK, said:

“The oil-majors are set to make gargantuan profits from global instability while ordinary people pay the price of Trump’s war in Iran. Calls to scrap the windfall tax early are not just misguided—they are a slap in the face to people struggling with rising energy costs, and more drilling in UK waters won’t cut bills or protect UK households. The fossil fuel industry should be contributing more tax, not less“

The policies put forward by the organisations are a strengthening of the existing energy profits levy on North Sea oil and gas companies, alongside a new levy on UK bank profits made from the British public. Additionally, excess profits taxes are specifically called for on industries such as defense, big agribusiness, and associated artificial intelligence and big tech firms which are predicted to make bumper profits as a direct result of the war on Iran.

Simon Francis, Coordinator, of End Fuel Poverty Coalition, said:

“Gas prices have more than doubled since late February, and households are already struggling with energy bills that have been stuck at elevated levels for five years. The latest global disruption is a stark reminder of the cost of our dependence on imported fossil fuels. Every time conflict or instability strikes overseas, ordinary households pay the price through their energy bills.

The Government must act urgently to protect households from the impact of rising prices and ensure that the billions in excess profits energy companies are making during this crisis are redirected to support the people who need it most. Wiping out household energy debt, strengthening the Warm Home Discount and accelerating investment in home insulation would all help cushion the blow.”

The letter notes that previous moments, like the Covid-19 pandemic and invasion of Ukraine, “saw the wealthiest households and super-rich amass even greater fortunes – to the tune of hundreds of billions of pounds, while millions were left struggling.” Research from Unite the Union found that pre-tax profit margins were 30% higher on average in 2022 compared with the average across 2018 and 2019. Post-tax margins were on average 20% higher.

Conor O’Shea, Campaign Coordinator, of Cost of Living Action said:

“The Prime Minister, Chancellor, Energy Secretary and the Government’s cost of living champion have all pledged that profiteering will not be tolerated during this crisis. Those words must now be matched by decisive action. It is simply unacceptable that some individuals and corporations are getting richer off the backs of households struggling with rising bills. A tax on excess profits is a fair and necessary step to rein in corporate greed and prevent the cost of essentials from spiralling further.”

[Ends]

Notes to editors:

• Contact – Jake Woodier, Deputy Director at Tax Justice UK on 07503 789994 or jake@taxjustice.uk

• The full letter and list of signatories can be found here. 

• Tax Justice UK is one of the country’s leading campaigning and advocacy organisations working to bring about progressive tax reform. We campaign for a fairer tax system that takes more from the very wealthy and actively redistributes wealth to tackle inequality; that funds high quality public services that we all rely on; and raises money to tackle climate change and doesn’t subsidise environmentally destructive business.

• The Energy Profits Levy, introduced as a ‘windfall tax’ on fossil fuel companies pumping oil and gas in the North Sea, has generated billions of pounds in revenue to the Treasury in the years since 2022. In 2022/23 revenues were (non seasonally adjusted) ~£4.25bn, and in 2023/24 ~£3.19bn. In the period since, the cost of oil and gas has reduced, therefore the tax outturn is lower in comparison to previous years. Total revenue since June 2022 stands at ~£12.198bn.

• An example of a banking levy is that proposed by Positive Money. They estimate this would have raised £12.5bn from the 2025 profits of the four big banks alone, had the Chancellor implemented it in last year’s Autumn Budget.