The Socialist 8 January 2020 |
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Shell pays £0 corporation tax, and plans huge hike in fossil output
- Nationalise the energy companies!
Shell, photo CEphoto, Uwe Aranas/CC (Click to enlarge)
Michael Johnson, Leeds Socialist Party
Faced with increasing scrutiny worldwide, oil giant Shell has revealed it paid no UK corporation tax in 2018. This is despite Shell also earning nearly £557 million in pre-tax profits in the UK over that year, with global pre-tax profits being $35.6 billion.
This has come about due to Shell receiving huge tax refunds for decommissioning its North Sea oil platforms. To help balance the expenses of plugging and abandoning their (highly profitable) oil wells and removing their equipment, the government lets energy companies deduct costs from their taxable profits or claim back tax they had previously paid!
Shell also reported that more than two-fifths of its profits in the UK come from joint ventures overseas, and so claims to have paid tax on these in other countries. The firm's tax arrangements including dodging taxes via offshore trusts, and even moving its headquarters from London to The Hague, where it has also failed to pay corporation tax.
And despite claims that Shell would be using its profits to invest in becoming world's biggest clean energy company, this has failed to materialise. Instead, Shell plans to increase its fossil fuel output by 38% this decade, according to analysts at Rystad Energy!
Past Tory governments have promised to 'get tough' on tax avoidance, but unsurprisingly this hasn't been delivered. Instead, despite massive profits, it has fallen on the general public to cover the costs of decommissioning.
The National Audit Office has warned this could cost taxpayers £24 billion as reserves in the North Sea run dry. Indeed, Stuart McWilliam, campaign manager at Global Witness, said "the fact that Shell and other major oil companies are regularly getting huge tax rebates, despite making vast profits, is a feature that is now baked into the UK oil and gas tax system."
So profiteers like Shell use up natural resources, pollute the planet, make massive money gains, then stick us with the bill - all while refusing to pay any tax! We need nationalisation.
All of the oil and energy companies should be brought into public ownership. They should be run under democratic workers' control and management, as part of a socialist plan of green energy production. Only then we could guarantee an efficient, affordable, ecological service.