‘Nothing is off the table’: Downing Street declines to rule out bigger windfall tax on energy companies as oil giant Shell reveals £8.2bn profit
- Shell revealed it had raked in £8.2 billion without paying a penny under scheme
- No 10 said ‘nothing is off the table’ ahead of next month’s November 17 budget
- Sources said ministers were considering extending the Energy Profits Levy
Downing Street opened the door to extending the windfall tax on energy firms yesterday after Shell revealed it had raked in £8.2billion in profits without paying a penny under the existing scheme.
No 10 said ‘nothing is off the table’ in next month’s Budget as ministers scramble to fill a £40billion black hole in the public finances.
Treasury sources confirmed that ministers were considering options to extend the existing Energy Profits Levy, but said no decisions had been taken.
Shell revealed it had raked in £8.2billion in profits without paying a penny under the existing scheme
No 10 also refused to rule out a windfall tax on the banks, which are set to make bumper profits because of the surge in interest rates.
Shell’s £8.2billion profits between July and September followed on from the previous three months when it accumulated a record £10billion.
The results mean Europe’s largest oil and gas group is on course to smash its annual profit record of £27billion set in 2008 as the firm has already reported earnings of more than £26billion in the first nine months of the year.
Shell is Europe’s biggest oil and gas company, with 80,000 employees globally in a business that includes drilling for oil and gas, operating petrol forecourts and a growing electricity generation operation.
In May this year, the Energy Profits Levy – or windfall tax – on the profits of energy firms was announced by the then chancellor Mr Sunak, who said at the time that it would raise £5billion in its first year.
Cabinet Office minister Nadhim Zahawi said Prime Minister Rishi Sunak (left) and Chancellor Jeremy Hunt (right) would ‘look at every decision’ ahead of the November 17 Budget
But there was outrage as Shell revealed yesterday it has paid zero windfall tax because of the scale of its investment in the North Sea. ‘We simply are investing more heavily than we have and therefore we don’t have profits which we can be taxed against,’ Sinead Gorman, chief financial officer, said.
Oil firms have been able to reduce the tax they pay because they are making investments in the North Sea. It means in recent years the likes of BP and Shell have paid almost no tax in the UK.
But Shell chief executive Ben van Beurden signalled that the company was ready to pay the tax next year.
He said: ‘We should be prepared and accept that our industry will be looked at for raising taxes in order to fund the transfers to those who need it most.’
Asked about the prospect of a bigger windfall tax, the PM’s official spokesman said: ‘I am not going to get into tax measures ahead of a fiscal event.
‘It is accurate to say no options are off the table given the economic circumstances.’
Liberal Democrat leader Sir Ed Davey said the Government’s failure to levy higher taxes on the energy giants was ‘an insult to struggling families’.
He added: ‘Even the chief executive of Shell has admitted oil and gas companies should be taxed more.’
Labour climate change spokesman Ed Miliband said the existing windfall tax ‘is further proof we need a proper windfall tax to make energy companies pay their fair share.’