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Shell’s CEO calls for business tax to help poorest consumers meet energy costs

Evening Standard logo Evening Standard 10/4/2022 Rhiannon Curry
Commonwealth Heads of Government Meeting © PA Archive Commonwealth Heads of Government Meeting

European governments should tax businesses to help people meet soaring energy costs but shouldn’t intervene to cap gas prices, according to Shell’s chief executive.

Ben van Beurden told the Energy Intelligence Forum in London on Tuesday that European energy prices and the huge volatility in the markets threatened broader social instability.

“You cannot have a market that behaves in such a way ... that is going to damage a significant part of society,” he said.

“One way or another there needs to be government intervention that somehow results in protecting the poorest,” Van Beurden said.

“That probably may then mean that governments need to tax people in this room to pay for it.”

Governments across Europe are currently grappling with how to best finance protection for consumers amid historically high energy prices.

In the UK, the government introduced the Energy Profits Levy, a new 25% surcharge on the profits the oil and gas sector is making.

But it chose to borrow rather than impose further levies in order to fund subsidies including the energy price guarantee, which reduces the unit cost of electricity and gas so that a household with typical energy use will pay around £2,500 a year on average for their energy for the next two years.

Prime minister Liz Truss came under fire on Tuesday for refusing to say whether she would raise benefits in line with inflation in order to support Britain’s poorest families.

Last week European Union ministers agreed to tap windfall profits of companies and redirect them to customers and businesses as part of an initial energy package, a move which it hopes will raise €140 billion (£121 billion).

“I think we just have to accept as a society - it can be done smartly and not so smartly. There is a discussion to be had about it but I think it’s inevitable,” van Beurden said.

But he said that European governments should not intervene in market exchanges in a bid to limit gas prices.

“Can we make a meaningful intervention in gas markets here in Europe? That is a much more challenging prospect,” he said.

“The solution should not be government intervention but protection of those who need protection.”

Van Beurden also said that he “struggled” to see how a price cap on Russian oil, which is being discussed among Western governments, would work.

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