Rishi Sunak understands public anger over ‘extraordinary’ Shell profits, No 10 says

Shell should invest more of the money in the UK, Downing Street suggest

Rishi Sunak “absolutely” understands people’s anger over Shell’s record profits at a time of soaring household energy bills, Downing Street has said.

No 10 also suggested that the oil giant should invest more of its record-breaking $40bn bonanza in the UK.

But the prime minister’s official spokesperson would not be drawn on calls for a higher windfall tax on energy firms, saying he was “not aware” of any plans to reform the levy.

Asked if he could understand public anger, Mr Sunak's spokesperson told reporters: “Absolutely. We recognise that the public will think these are extraordinary profits, clearly.

“That’s why once it was clear that there would be a windfall because of various factors including the war in Ukraine, we put in place the energy profits levy.”

He added: “The new headline 75 per cent tax rate is comparable with other North Sea tax regimes including Norway, and we think that strikes a balance between funding cost of living support while encouraging investment in order to bolster the UK energy security.”

The government would “of course” want to see oil and gas giants invest more in the UK, he added.

Asked if Shell was investing enough, he said: “Of course, we'd always want to see companies invest more in the UK, certainly.”

The highest profit in its 115-year history comes as the company benefited from soaring oil prices driven by Russia’s invasion of Ukraine.

Profits increased by 53 per cent to £68.1bn in 2022, while earnings adjusted for taxes doubled to £32.2bn.

The £32.2bn figure is more than double the government’s entire budget for environment (£13.9bn) and a third of the education budget, which stands at £100bn.

Opposition parties and climate campaigners said the government was letting fossil fuel companies “off the hook” by failing to impose a strong enough tax on the “proceeds of war”.

Ed Miliband, the shadow climate secretary, said: “When it comes to oil and gas interests, Rishi Sunak is too weak to stand up for the British people.”

The energy price cap is due to rise in April. Mr Miliband said: “It is only right that the companies making unexpected windfall profits from the proceeds of war pay their fair share.”

Liberal Democrat leader Sir Ed Davey said: “No company should be making these kind of outrageous profits out of Putin’s illegal invasion of Ukraine.” Shell said it paid £1.5bn in windfall tax charges to the UK and EU in 2022.

Friends of the Earth’s Sana Yusuf said the latest Shell profits were “staggering”, considering that “millions of people have been facing the impossible choice between putting food on the table and heating their homes”.

TUC general secretary Paul Nowak said the “obscene profits are an insult to working families” as the union called for a larger windfall tax. “The time for excuses is over,” he added.