The Scotsman: Windfall Tax Will Jeopardise Jobs, Warns Shell: “Shell’s UK chairman James Smith was today giving evidence to the House of Commons’ trade and industry select committee which is conducting an inquiry into high gas and electricity prices.”: “Committee chairman Martin O’Neill said rising oil prices had put Shell’s profits “beyond the dreams of avarice”. (ShellNews.net) 26 Jan 05
By Jamie Lyons, PA Political Correspondent
Fuel giant Shell warned tonight that a windfall tax on its profits could put jobs at risk.
MPs raised the possibility of the tax as oil prices climbed on Monday to within a dollar of 50 dollars a barrel.
Shell said investor confidence was only just returning after the introduction of the Supplementary Corporation Tax in April 2002.
It said the recent offshore revival would be put at risk by further tax increases.
Shell’s UK chairman James Smith was today giving evidence to the House of Commons’ trade and industry select committee which is conducting an inquiry into high gas and electricity prices.
Labour MPs on the committee suggested a windfall tax similar to that imposed on the excess profits of the privatised utilities in 1997 which funded the Government’s flagship New Deal programme.
Committee chairman Martin O’Neill said rising oil prices had put Shell’s profits “beyond the dreams of avarice”.
Mr Smith said: “We recognise the high prices but we remember that seven or so years ago the price was only 10 dollars a barrel.
“We are confronted with major capital investment projects that can last 30 years or longer and considerable uncertainty in the technological sense and considerable uncertainty in the commercial sense.
“We are looking for fiscal stability over that period because there will be high prices, but there will also be times of low prices as well.
“Any thought of windfall profits taxes, we would say consider the unintended consequences that we could end up denting investor confidence, not getting the full potential out of the North Sea and putting jobs at risk.”
Kieron McFadyen, Shell’s director of exploration and production, said he was “deeply concerned” at the notion of a windfall tax.
“Any change in the fiscal regime or any notion of a windfall tax will dent investor confidence,” he told MPs.
“I am absolutely convinced of that. I see an impact on investor confidence. I see an impact on activity levels, on projects and production levels overall.”
BP also gave evidence to the committee and warned that a windfall tax would destroy investor confidence in the North Sea.
The committee is investigating gas and oil prices after complaints from business and consumer groups.
MPs were told today that rising fuel prices could put the recovery of British manufacturing at risk.
The Engineering Employers Association, which represents around 6,000 engineering and manufacturing firms, said the situation facing manufacturing was the best it had been for several years.
But if fuel prices continued to rise the recovery could be put at risk, it warned.