BP "driving up prices and profits” says IPPR
The UK’s leading progressive thinktank, IPPR, has responded to the announcement that BP has made £4 billion ($5 billion) in profits in the last quarter (Jan-Mar). BP have also announced a new round of share buybacks, transferring £1.4 billion ($1.75 billion) to shareholders, following on from £8.2 billion ($10.3 billion) of buybacks in 2022.
Joseph Evans, researcher at IPPR, said:
“BP continues to profit from the cost-of-living crisis. While some UK households spent the winter facing the bleak choice between heating or eating, BP continued to exploit geopolitical fallout from war in Ukraine - driving up prices and profits.
“Instead of using these profits to invest in net-zero or reduce costs for consumers, BP is transferring an outrageous sum of wealth from ordinary households to their investors. The USA and Canada have already taken 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 announced £55 billion share buybacks in 2022.
President Biden has recently introduced a tax on share buybacks to help alleviate the cost-of-living crisis in America.
Replicating Biden’s proposed 4% tax on share buybacks could raise nearly £2 billion a year.
Share buy backs were actually illegal as a form of market manipulation until 1981.