Shell chief executive Ben van Beurden has “flung open a door on windfall tax”, a finance expert has claimed.
The outgoing head of the energy giant told a conference in London that governments need to tax energy firms to help the poor, describing such levies as “inevitable”, echoing a similar sentiment from Equinor CEO Anders Opedal last month.
Susannah Streeter, senior investment and market analyst at financial services firm Hargreaves Lansdown, said Mr van Beurden’s comments would “reignite the debate”.
She added: ‘’Shell’s boss has flung open a door on a windfall tax which the UK government had been trying to close.
“This will reignite the debate over how profits of energy giants should be taxed, just as a row rages about whether welfare spending will be hit to pay for the Truss administration’s slash and spend policies.”
‘Protecting the poorest’
It comes as industry groups like Offshore Energies UK (OEUK) – of which Shell is a leading member – and even new Prime Minister Liz Truss have attempted to prevent any further extension to a windfall tax on such companies.
Rishi Sunak imposed the Energy Profits Levy on producers in May, increasing their headline tax rate from 40% to 65%.
Labour leader Sir Keir Starmer, whose party is polling comfortably ahead of the Tories following the chancellor’s “mini-Budget” last week, backs an extension to the windfall tax.
Mr van Beurden told conference delegates “one way or another there needs to be government intervention”.
He added: “Protecting the poorest, that probably may then mean that governments need to tax people in this room to pay for it.”
Reading the room
Ms Streeter said Shell’s boss had “clearly been reading the room” on windfall tax, given the worsening energy crisis.
She added: “There has been a sanguine reaction from investors to his remarks that government intervention was inevitable, with Shell’s share price rising in the hours that followed.
“His remarks will be seen as being generally supportive of the EU’s plans to tap profits of companies to help pay for initial energy support packages, and they also shine the spotlight on the UK Government’s vow not to further tax oil and gas companies over and above measures deployed by former chancellor, Rishi Sunak.”
Mr van Beurden will retire at the end of the year to be replaced by Wael Sawan, the current head of the group’s integrated gas and renewables division on January 1.
OEUK and others have argued that an extension to the windfall tax would threaten energy security in the UK.
The trade body declined to comment on Mr van Beurden’s remarks.
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