Response to interpellation 2022/23:235 on tax on profits in the electricity market

Finansministern Elisabeth Svantesson (M)

Mr. Speaker!

Mr. Speaker! Mikael Damberg has asked me if I intend to return with new proposals on the taxation of capital gains when the current legislation expires on June 30.

According to an EU regulation decided on October 6 last year, a mandatory revenue cap shall be introduced in the member states. In Sweden, supplementary legislation has been required to apply the revenue cap. This is partly due to the fact that the regulation contains different options for the member states. The Government has handled the issue as quickly as possible, and on March 1, the tax on excess revenue from electricity entered into force. Through the tax, the revenue cap can begin to be applied in Sweden.

It is important to mention in this context that the application of the revenue cap is not a prerequisite for the payment of electricity support. In the same EU regulation that forms the basis for the revenue cap, it is stated, for example, that so-called bottleneck revenues may be used to finance measures to support electricity end-users. This is also happening now, and it concerns support in the magnitude of 55 billion kronor.

It follows from the EU regulation that the provisions on revenue caps shall apply until 30 June 2023. The Commission may, however, if justified by the economic circumstances or the functioning of the electricity market in the Union and individual Member States, propose, among other things, that the period of application of the regulation be extended. Furthermore, the Commission has recently submitted a proposal on a revised electricity market design.

Before we know more about how long the already decided revenue cap shall be applied and how the work with revising the electricity market design is progressing, it is too early to say what the national legislation shall look like further ahead.

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Mikael Damberg (S)

Mr. Speaker! I want to begin by thanking the Minister for Finance for the answer to the interpellation. Elisabeth Svantesson and I stood just a short while ago and debated the household's finances, and I am struck by the fact that the Minister for Finance, in the same way as in the previous debate, is somewhat passive in the answer to the interpellation.

Instead of declaring an opinion and explaining how one wants to see the development moving forward, the Finance Minister shifts the responsibility for the development to the EU. But the truth is that we could have done much more if the political will had been there, and there are also opportunities to act moving forward if the political will exists.

Mr. Speaker! Let me clarify a few things for those listening to or watching the debate. Sweden has unique opportunities to provide households and companies with cheap electricity. We Social Democrats have proposed a new system with folkhemsel, which would enable lower electricity prices for ordinary households. But that is another matter.

Now we are talking about the fact that we still have a lot of electricity production in Sweden at a low cost. We actually also had – which perhaps no one really believes – the lowest electricity prices in the EU during 2022. At the same time, Sweden had a large surplus that was exported to other countries, and that export was larger than perhaps ever before.

But the moments when we are forced to import electricity and use fossil fuels to produce electricity, Europe's high gas prices affect the rest of the market, and then the price is pushed up in Sweden.

In recent years, Swedish electricity prices have reached extreme levels from our perspective, while production costs have remained unchanged. And what happens then? Well, those who produce electricity – electricity producers and actors in the financial markets for electricity – have been able to make record profits at the expense of Swedish households and companies. While the bottleneck revenues to Svenska kraftnät arise when the price of electricity differs between different price areas, the excess profits arise when the average electricity price in Sweden is higher than normal.

What we want to do, which is also the basis for the EU decision, is to return excess profits back to electricity consumers. It is not reasonable that some companies make billion-dollar profits while households have difficulty putting food on the table or are forced to leave their homes because they cannot pay their electricity bill.

I mean that the handling of the revenue ceiling has been characterized by passivity on the government's part, similar to some other crisis policies. Those who ultimately are affected by this are Swedish households and small business owners, who are currently struggling to make ends meet.

The measures described in the EU regulation on a revenue cap on electricity should be seen as a minimum requirement for the member states. But Sweden has every opportunity to take its own initiatives in the matter, which countries such as Finland, France, Germany and Austria have done. Sweden was, as far as I know, almost the only country in the EU that did not act against the electricity companies' profits during the winter months, but that is perhaps a separate discussion.

According to our estimates, the excess profits on the electricity market during 2022 amounted to on the order of 150 billion kronor in our country. That is an enormous amount of money, and just over half came from households. If we could use even a fraction of this to finance support for households, it would make an enormous difference for very many people.

How will it be next winter? Will the electricity companies and other actors in the electricity market be able to continue to pull in billions in excess profits while ordinary people turn over every penny to make their finances work? I hope that the Finance Minister can give a somewhat clearer answer on that during the debate.

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Peder Björk (S)

Mr. Speaker! When one takes note of the answer to the interpellation from the Minister for Finance, one can somehow sense that the Minister for Finance and the government did not actually want to see such a tax at all.

The tax on profits, which has now finally been introduced, is based on decisions in the EU to actually ensure that a portion of the excess revenues and profits that have arisen through the resulting electricity situation in Europe are taken back. The government's actions during the autumn only reinforce the suspicion that the government actually did not want to see such a tax.

First and foremost, the government ensured that it was slow in its actions to even get the Swedish legislation in place. It was among the last governments in the entire EU to get this in place. And not only that, but due to this delay, the tax was not introduced until March 1st this year, even though the EU legislation allowed it to be introduced from December 1st last year.

This has collectively resulted in that several billion in tax revenue have been lost, which could have been used to support households. In addition to the government being slow to act, it was chosen to settle on a construction that resulted in minimal tax revenue being collected. It became approximately 150 million kronor, according to the government's own calculations, when it could have been several billion.

I have some questions for the Minister for Finance based on how the government chose to act during the autumn with the lack of readiness that caused the Swedish state to lose several billion in tax revenues. Have the government and the Minister for Finance drawn lessons from how they acted during the autumn? Have you considered how you could do things differently if you are now prepared to ensure that you continue to have such a tax coming winter?

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Finansministern Elisabeth Svantesson (M)

Mr. Speaker! Thanks to both Mikael Damberg and Peder Björk! I still think that one should stick a bit more to the truth when it comes to whether the legislation could have been in place earlier and if it could have been many billions more. No, it could not. I think it is important for the listener and for the one who reads the minutes after the debate to know this. I also believe that Peder Björk knows it.

In Sweden, the revenue ceiling is a form of taxation. Everyone sitting in the Committee on Taxation knows that. That was also said by the previous government, because this issue first arose during the Social Democrats' time. It cannot be done retroactively, and it is tax legislation. It takes time. This has gone quickly for being new tax legislation, and the members of the Committee on Taxation know that more than anyone else. But now the revenue ceiling is in place, and it is very good.

One must also remember that Sweden is unique in many ways. When it comes to this regulation, which includes the revenue cap, it also concerns the possibility for Sweden to use capacity charges. Sweden has 40 percent of all of the EU's capacity charges. That was, of course, the absolutely most important part for us in Sweden: to ensure that our end consumers, companies and households, can get these money back.

This should be remembered when one talks about over-revenues. There are large profits on the market, but most revenues were thus returned to consumers and now also to companies. It is worth reminding. Last year, it concerned as much as 70 billion in capacity fees in total, and 55 billion are paid out. It is important for Sweden that it is possible to continue, and we do not yet know how it will become.

The government, together with other EU countries, is active in the discussion with the Commission to find even better tools and to continue with tools that work ahead of next winter. I believe the starting point for the interpellation is to shed light on what can be done and what should be done. We are working at full capacity in different departments in the Government Offices to prepare for next winter. We are preparing in both the Ministry of Climate and Enterprise and the Ministry of Finance.

Let me add something right now. The EU Commission recently submitted a proposal for an electricity market design. It is worth being at the forefront in the EU when the issue is discussed. There are things that are good, and there are things that could pose problems for Sweden.

Mr. Speaker! Let me finally say that the situation is tough. There is an energy crisis all around in the entire EU, and it is somewhat different in different countries what type of energy sources one has used - but the prices are high in many places. We need, together with the EU, to find better tools to build more electricity production and find ways to support households during the time that prices will be high. The Government has both the production and how the households can manage the situation before its eyes.

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Mikael Damberg (S)

Mr. Speaker! Elisabeth Svantesson returns to the electricity support, and it is pleasing that we agree that it is good that the capacity fees are reimbursed to households and companies. It was fundamentally a Social Democratic proposal, our direction and our decision, which the government has now worked further with. On that, we agree. But it is a bit empty on answers to the question regarding the excess profits. After all, we are talking about two different issues and sources of revenue.

Let me start with the electricity support. In this matter, the government's handling has left much to be desired. It was promised that the electricity support would be in place in November. That did not happen. Then it was supposed to be in place well before Christmas, but that did not happen either. It was significantly delayed. After great pressure, not least from the Socialdemokraterna, the government backed down and took all of Sweden into the discussion about the electricity support. That was not the case from the beginning from the government's and Sverigedemokraterna's side. Now that the support to households finally begins to be paid out, it turns out that they have bungled the payments. Some receive an enormous amount of support; for example, some individuals have received over 700,000 kronor. Different agencies have given different instructions on how to handle the money. Much of this is classified at the government's request.

The entire handling and the tours show that the electricity support has not rolled out completely painlessly. The problem is that this continues. There are many who still have not received the electricity support. Above all, companies all over Sweden are still waiting for notification on when the electricity support will arrive and what it will be like. It is 29 billion kronor that are to go to the companies, and it has not yet been approved by the EU Commission.

I asked a colleague to speak with the Government Offices this morning, who were once again informed that some state aid notification has not even been submitted. How is that possible? That question will continue to be discussed.

Let me return to the overarching question. I share the Finance Minister's view that the economic policy should be well-balanced and that the fiscal policy as a whole must not be expansionary. To let some companies make enormous profits because electricity prices have been exceptionally high due to a war in Europe, while production costs have remained unchanged, is hardly a balanced policy in this situation since households are so pressured.

I mean that it is not reasonable for the excess profits to simply stay with the companies. When there is an opportunity to transfer a part of the excess profits back to households, we should take that opportunity. In a historically difficult situation for households, the policy must act and be able to prioritize. That requires the government to have forward momentum, have its own proposals, and present legislation that makes it possible to change an unreasonable situation.

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Peder Björk (S)

Mr. Speaker! I note that the Minister for Finance is not in the least self-critical regarding the autumn process. On the contrary, the Minister for Finance says that it was as fast a process as was possible and that the tax legislation poses obstacles to handling it in a different way.

I believe that the government uses the tax legislation as a cover to avoid standing up for its own priorities. When it came to getting confidentiality in place for the payments of the electricity support, it certainly was possible to do it quickly. When it was time to remove the bonus on electric cars, it happened from one day to the next, and when they are going to lower the tax for high-income earners, it goes quickly.

It is clear that it could have been done faster during the autumn. The decision was made in the EU in early October. There were all the opportunities to go full speed in working with the legislation. The Government could have seized the opportunity to submit a stop order to the Riksdag and in that way ensure that even if the legislation came into place after the turn of the year, it could have applied from December 1.

The Finance Minister's answer that this has gone so incredibly fast, that one did as well as one could, is only about not daring to stand up for one's own priorities. It makes me worried. If that type of legislation is implemented even this coming autumn, the Finance Minister's statement today implies that the Swedish households will be withheld several billion that could be collected in taxes and could be used for support to the households because the government does not want to implement such a tax in Sweden.

(Applause)

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Finansministern Elisabeth Svantesson (M)

Mr. Speaker! I am still surprised that there are Members of Parliament who say that this does not require tax legislation. We must have a coffee sometime and talk this through; it is quite obvious that this is a question of a new tax in Sweden.

Such things take time. Everyone who knows what new legislation entails knows that it takes time, but the department officials have made fantastic efforts from the time this started until we got it in place. I would like to discuss whether other new complicated legislation has been handled just as quickly, but we can return to that after the debate. It is important not to withhold the truth from those who are listening.

The government has already managed to get a lot done that many governments have not managed to do before. For the first time in 40 years, there is a majority in Sweden's Riksdag for nuclear power. Nuclear power will not save Swedish households during next winter - I will return to that soon. But it will help my children and grandchildren when they get older because there will be more producible clean electricity. It will be incredibly important for the transition, growth, and the households' economy.

Here and now, the government is working fully with various tools ahead of next winter. I have a question for Mikael Damberg. It is very good that the revenue cap has been put in place, but is it obvious that we should continue with exactly this revenue cap, or can it be done in another way? We must also remember that a portion of the profits that companies make is needed for investments in new energy and electricity production. Where is the limit and the balance? I am problematizing this now because it is not obvious how the revenue cap should be designed. The legislation that is now in place applies now. The revenue cap is therefore here and now. It is March now, soon it is April and then it is May. Whether it is to be extended and how it should be extended are discussions that are ongoing. That is why I do not give a yes or no answer. Tools and efforts weigh differently for the winter. The work is also being done together with other EU countries because – and the Social Democrats know this – the entire energy market and electricity market is European. We have a common EU market.

I am ready to discuss many different proposals to facilitate things for households and, above all, to ensure that we get more electricity production. I am not closing any doors. But the question was about the revenue cap, and the answer is that we are working at full capacity on a broad front and, of course, will return regarding this specific question about the revenue cap. But one thing you can be absolutely sure of: We are now doing everything we can to repair a more or less damaged electricity system.

Speaking of being self-critical, I do not think I have ever heard any social democrat here in the chamber who seems to regret that two reactors were shut down quite late - just before the war broke out - and prices were already starting to rise then. But I will leave that here.

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Mikael Damberg (S)

Madam Speaker! That the government is under pressure in this issue is obvious when one tries to lie about how the nuclear power decisions were and were not made. It is known to everyone that they were commercial decisions that were made because it was not profitable.

My question to the Minister for Finance today was whether the government intends to return with new proposals on the taxation of excess profits in the electricity market when the current legislation expires, so that these excess profits do not remain with the state. They should return to the households, which are under severe pressure from high prices.

Today, the government does not seem to be able to give any such announcements. They continue to drag their feet – they say they must wait for the EU, and they must see how the situation develops.

Then I become a little worried when the Minister for Finance does not know that we Social Democrats have submitted a motion on this issue. We have submitted a motion stating that the government should map out where and with which actors the excess profits are now occurring, because we know that they do not only occur with the electricity producers.

We have proposed that a more powerful proposal should be developed that returns more of the excess profits to the households. It is not reasonable with a system that returns 150 million kronor if one believes that the excess profits during 2022 were 150 billion kronor. It is easy to see that one can take a number of billions back to the households there and ensure that legislation is in place before next winter. That is our direction; we are very clear, but the government cannot give an answer.

When it comes to the question of whether it is profitable to invest, it was decided to make investments long before the prices soared in Europe and it still is, so it is not unprofitable to make investments in power production in Sweden and Europe.

But this is about the single mother. It is about pensioners who cannot afford dental visits. It is about children who cannot eat until they are full. In that case, electricity prices are important, and I assume that a Swedish government acts and has forward momentum in such important issues.

I hope that the government will come to its senses and actually learn from the mistakes that have been made so far.

(Applause)

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Finansministern Elisabeth Svantesson (M)

Madam Speaker! I understand that the revenue ceiling is one of Mikael Dambergs favorite proposals, and it can certainly be. I think it is very good that we have gotten it in place because it is reasonable with this ceiling.

I think it is even more reasonable that we can now send back the capacity fees to both households and companies. Companies have never previously received this type of support, which this government is now providing.

Furthermore, we are investing for companies that are extra electricity-intensive, which might have converted their production to be greener and which, in a tough and hard situation, were suddenly hit by high electricity costs. Therefore, we ensure that those companies receive support so that they can continue and do not need to lay off people or shut down.

Madam Speaker! This important issue is complicated, but it is entirely possible to do very much well moving forward both for Swedish households and companies and for us to be able to transition at the same time.

The energy issue is currently one of the most important issues for very many Swedes and very many companies. Therefore, we are actively working on just this issue.

My point, which I was clear about, is that we return to the question that Mikael Damberg posed. I understand that he wants an answer here and now, but we are doing things. We do not wait for the EU. We work with and in the EU, and that is important. We shall do it as well as possible and in the very best way so that Swedish households and Swedish companies benefit.

The interpellations debate was hereby concluded.

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