Record BP profits scandalous says IPPR

From: Think Tanks
Published: Tue Feb 07 2023

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.

Company: Think Tanks

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