New Prime Minister Liz Truss has rejected calls for a fresh windfall tax on profits made by energy firms.
Questioned by Labour leader Keir Starmer at her first prime minister’s questions (PMQs) at Westminster on 7 September 2022, Truss, said: “I am against a windfall tax. I believe it is the wrong thing to be putting companies off investing in the UK”.
Shortly after PMQs finished the Labour MP for Coventry South, Zarah Sultana, posted a widely-shared tweet about the new PM’s connections to the oil and gas industry. It was shared more than 18,000 times.
Claim: “£170,000,000 profits the oil and gas industries are expected to make”.
Ferret Fact Service contacted Sultana and asked her to provide evidence for her claim that oil and gas firms are expected to make profits of £170bn.
In reply, her office cited a report on 30 August 2022 by Bloomberg, which ran the headline: “UK sees up to £170bn excess profits for energy firms.” The article was based on “Treasury estimates” from one anonymous source who allegedly leaked the information.
It referred to “gas producers and electricity generators” and claimed that £170bn in profits may be generated over the next two years. Bloomberg also reported that the Treasury said it did not recognise the figures.
It’s important to note that Bloomberg’s article cited “energy firms” — which include nuclear and renewables — and not just the “oil and gas industry” as per Sultana’s tweet.
On 1 September 2022 Metro also reported that “energy firms were ‘on track to make £170,000,000,000 profits’ while you struggle.” The article cited a “leaked Treasury analysis” but also included a comment from the Treasury, saying: “we don’t recognise the figures”.
Prices have soared amid fears over supplies of energy caused in part by Russia’s invasion of Ukraine. In August, the world’s five biggest oil companies reported profits of nearly £50bn for the quarter April to June this year.
The world’s 28 largest oil and gas companies made a combined £159.83bn in profits in 2021, and Shell made £7.91bn in profit from January to March, almost three times what it made in the same period last year, according to an analysis by Climate Power.
Ferret Fact Service verdict: Half True
Claim: “[The Conservative] party has taken more than £1,500,000 in donations from the oil and gas industry since the last election”
In response to our evidence request, Sultana’s office cited a report by the Mirror to support her claim. The article was published on 12 November 2021 and based on “an analysis of Electoral Commission records” going back to 2019. It claimed that the party has taken almost £1.5m in donations from the energy industry under Boris Johnson.
The report said that donors included Alexander Temerko, the Ukrainian owner of Aquind who is also a UK citizen. The Mirror claimed: “Donors to the Tories include Alexander Temerko, the owner of Aquind. The energy boss and his company handed various MPs, including former cabinet ministers Liam Fox and Jeremy Hunt, and the current chief secretary to the treasury Simon Clarke, and the party, more than £350,000.”
FFS checked with the Electoral Commission and the total registered for the period is £426,465.
The Mirror also said that Ian Taylor, the former chief executive of Vitol, had handed the party some £115,000 since 2019. Vitol is a major trader and supplier of North Sea crude oil. This figure is correct but Taylor has not donated since the last election, which was on 12 December 2019, so his donation was prior to the vote.
Other donations cited included £500,000 from Mercantile & Maritime, a commodities trading firm founded by oil broker and billionaire, Murtaza Lakhani. This figure is correct but it was donated in November 2019, prior to the general election referenced by Sultana in her tweet.
The Ferret calculated that those cited by the Mirror have donated £524,215 to the Tory Party since the last election.
However other media have also reported significant donations to the Conservative Party. They included The Guardian last year which said the party and its MPs had registered £1.3m in gifts and donations from “climate sceptics and fossil fuel interests” since the 2019 general election. However its article includes donations by airports and think tanks which are arguably not part of the oil and gas industry.
Open Democracy reported last year that more than £1m had been donated, but its article only cites donations amounting to £762,000. In July Desmog reported that Priti Patel MP, former home secretary, had received £140,000 in donations this year alone from “donors with significant fossil fuel and offshore energy interests” while the Mirror reported this month that Liz Truss registered a £100,000 donation from the wife of a former BP executive.
There has been significant money donated from the oil and gas industry to the Tories since the 2019 election, but different media appear to have calculated their sums differently.
Ferret Fact Service verdict: Half True
Claim: Liz Truss is “a former Shell employee”
Truss began her career at Shell as a trainee under a graduate scheme and later became an industrial economist with the oil company. She worked for the firm for four years and left in 2000.
Ferret Fact Service verdict: True
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Photo credit: iStock and curraheeshutter
This article was updated on 16 September 2022 at 14.10 to clarify that Alexander Temerko is Ukrainian and not “Russian-born” as the Mirror reported in its article.