LONDON’S BUSINESS NEWSPAPER
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ISSUE 3,930
CITYAM.COM
BUMPER PROFITS
BP SCALES BACK CLIMATE PLEDGES AS IT REPORTS RECORD £23BN PROFITS NICHOLAS EARL ENERGY giant BP is at the centre of a swirling political storm after unveiling record £23bn profits yesterday while scaling back its climate pledges – intensifying Labour’s demand for a toughened windfall tax. The oil and gas producer more than doubled last year’s profits, capping off the year with a three-month earnings window of just under £9bn – with its
bumper profits fuelled by soaring oil and gas prices following Russia’s invasion of Ukraine. BP also pared back its climate ambitions – easing plans to slash emissions from a 35-40 per cent reduction to a 20-30 per cent range by the end of the decade – and planned to produce more oil and gas over the next seven years compared with previous targets. The energy titan also hiked dividends
10 per cent – offering £11.7bn to shareholders over 2022. BP’s robust performance seemingly cheered investors, with shares up seven per cent at close of play yesterday, making it the top performer on the FTSE 100. The huge profits renewed Labour’s calls to strengthen the Energy Profits Levy. Shell also reported record annual profits of £32.2bn last week. Ed Miliband, shadow climate change
and net zero secretary, described the profits as “the windfalls of war”. He called for investment relief to be scrapped from the tax and for the levy to be backdated, which he said would bring in £13bn. But industry trade group Offshore Energies UK said these calls were “deliberately misleading”. BP said it will pay £1.82bn in UK taxes this year, including £580m in domestic windfall taxes.
FREE BREXIT
L&G: Get Solvency II reforms done LOUIS GOSS INSURANCE giant Legal & General (L&G) would like to see the UK “move more quickly” in reforming the EU rules that govern Britain’s insurance sector, one of the firm’s top execs told City A.M. Andrew Kail, chief executive of L&G’s institutional retirement business, said the firm was “very supportive” of the UK’s plans to reshape the EU’s Solvency II rules, which determine the amounts of capital insurers must hold to protect themselves from bankruptcy. The UK government set out its final plans for a postBrexit overhaul of the EU rules in November, with a view to unlocking billions from insurance firms’ balance sheets. “There’s a lot of capital sitting on insurance company balance sheets, that, were the regulatory treatment favourable, could be deployed and invested in things that do real societal good,” Kail said. “We’d like to see things move more quickly.” However, Kail said that getting greater clarity around the changes was just as important as getting them done quickly. “Clarity is always a good thing,” Kail said, as he argued regulatory certainty “just makes our planning process easier.”
UK to avoid recession but cost of living crisis will leave families £4,000 worse off JACK BARNETT THE UK is poised to narrowly avoid a recession but the cost of living crisis will still leave average Brits £4,000 worse off this year, fresh forecasts out today reveal. Britain’s economy is set to squeeze out 0.2 per cent of GDP growth in
2023, meaning it will just about swerve a technical reversal, two consecutive quarters of contraction, according to the National Institute of Economic and Social Research (NIESR). The projections run counter to several others published by the UK and world’s top economic
institutions. Just last week, the Bank of England said Britain is on course to suffer a 15 month long recession that will leave the economy around one per cent smaller. Its forecasts were revised up from a previous estimate of an 18 month slump knocking nearly three per
cent off GDP, published in November. Earlier this month the International Monetary Fund (IMF) said the UK would be the only rich economy to shrink this year, slimming down by 0.6 per cent. The NIESR’s brighter projections were driven by the organisation expecting household spending to
hold up reasonably well, leaving unemployment in the UK lower than what the IMF and Bank think. However, the organisation said this year will “certainly feel like a recession” for many poorer households. £ CONTINUED ON PAGE 2
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