Record BP profits “scandalous” says IPPR

7 Feb 2023 03:16 PM

The UK’s leading progressive thinktank, IPPR, has responded to the announcement that BP has made £4 billion ($4.8 billion) in profits in the last quarter (Oct-Dec), taking their total annual profits for 2022 to £23 billion ($27.7 billion). BP have also announced a new round of share buybacks, transferring £2.3 billion ($2.75 billion) to shareholders, taking the total buybacks from 2022 profits to £9.35 billion ($11.25 billion). 

Joseph Evans, researcher at IPPR, said: 

”While bill-payers across the UK are struggling with soaring costs, BP’s shareholders are reaping enormous payouts. After the oil giant made record profits in 2022 it passed an extraordinary £9.35 billion directly back to shareholders through share buybacks. That’s a scandalous use of surplus cash which could have been used to lower bills, or invested in the green transition. America and Canada are already taking action on excessive shareholder payouts: it’s long overdue for the government to follow suit by introducing a tax on share buyback schemes.” 

A recent report published by IPPR and Common Wealth argued that share buybacks are a direct cash transfer away from households struggling to pay bills, via energy company profits, to already-wealthy shareholders. The report, Buy Back Better, contained the following analysis: 

• Share buybacks channel profits from companies to shareholders by increasing the value of shareholders’ stock. 

• FTSE 100 companies have announced £55 billion share buybacks in 2022. 

• President Biden has recently introduced a 1 per cent tax on share buybacks to help alleviate the cost-of-living crisis in America. 

• A 25 per cent tax on share buy backs could raise £13.5 billion a year.