Five questions answered on BP's record fine

Criminal fine over Deepwater Horizon disaster.

A US court has approved the biggest ever criminal fine given in the US to British oil company, BP, for the 2010 Deepwater Horizon disaster. We answer five questions on the record breaking fine.

How much has BP been fined?

 BP will pay $4bn (£2.5bn) to the US Department of Justice, $1.26bn of which is a criminal fine. The sum also includes $2.4bn to be paid to the National Fish and Wildlife Foundation and $350m to be paid to the National Academy of Sciences, over a period of five years.

BP will also pay $525m to the Securities and Exchange Commission over a period of three years.

Why has BP been handed this fine?

In November BP agreed to pay this amount and plead guilty to 14 criminal charges relating to the 2010 Deepwater Horizon disaster, which was the biggest oil spill in US history. An explosion at the rig located in the Gulf of Mexico resulted in 11 workers loosing their life and an estimated 4.9 million barrels of oil escaping into the sea. The disaster occurred in April but the well wasn’t permanently shut until September.   

What did BP officials say in response to the fine at the hearing?

Speaking at the hearing to the court, families of the dead and other victims of the disaster Vice President of BP America, Luke Keller, said:

"We - and by that I mean the men and the women of the management of BP, its board of directors, and its many employees - are deeply sorry for the tragic loss of the 11 men who died and the others who were injured that day," said Mr Keller.

"Our guilty plea makes clear, BP understands and acknowledges its role in that tragedy, and we apologise - BP apologises - to all those injured and especially to the families of the lost loved ones.

"BP is also sorry for the harm to the environment that resulted from the spill, and we apologise to the individuals and communities who were injured."

What other repercussions does BP face in relation to the Deepwater Horizon spill?

Currently, two BP workers have been indicted on manslaughter charges and an ex-manager has been charged with misleading Congress.

BP is also in the process of reaching a settlement with other firms such Transocean, the owner of the rig who was responsible for the safety valve, and Halliburton, who provided cementing services. A civil trial that will determine negligence is due to begin in New Orleans in February.

What has American officials said about the record fine?

As quoted by the BBC the US Attorney General Eric Holder said:

"Today's guilty plea and sentencing represent a significant step forward in the Justice Department's ongoing efforts to seek justice on behalf of those affected by one of the worst environmental disasters in American history."

He added: "I'm pleased to note that more than half of this landmark resolution - which totals $4bn in penalties and fines, and represents the single largest criminal resolution ever - will help to provide direct support to Gulf Coast residents as communities throughout the region continue to recover and rebuild."

Record fine over Deepwater Horizon disaster. Photograph: Getty Images

Heidi Vella is a features writer for

Photo: Getty Images
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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.