Shell’s sickening profits show it’s time for bold action on energy – Richard Burgon MP


“It’s obscene that fossil fuel giants are making such super-profits during the biggest squeeze in living standards for decades… these bumper profits are a direct result of the soaring energy bills people face.”

By Richard Burgon MP

While millions of families struggle to heat their homes, oil giant Shell has announced the biggest profits in its 115-year history. 

Shell has pocketed an unimaginable £32 billion in profits, which is double last year’s total. These staggering sums mean it is raking in £88 million in profits every single day. That’s an eye-watering £3.6 million per hour.

It’s obscene that fossil fuel giants are making such super-profits during the biggest squeeze in living standards for decades. But of course, it goes further than that. These bumper profits are a direct result of the soaring energy bills people face.

We have seen so many heartbreaking stories about the social emergency that soaring energy prices have caused. But one of the most appalling is the news that British Gas has been using debt collectors to pursue energy debt who have been breaking into vulnerable customers’ homes and forcibly installing prepayment meters. 

This social emergency is going to get worse, with households set to face a further energy price hike of 40 per cent from April. The Tories’ so-called energy “cap” is fake. People will soon be paying more than double what they paid a year ago. 

All this alone should be enough to lead to bold action against the privatised energy giants. But these are also the very same companies that have driven us to the cliff edge of climate catastrophe and perhaps the greatest threat humanity has ever faced. 

Under pressure from Labour and campaigners, the Tories were forced to act and imposed a Windfall Tax on the energy giants last year. 

But this had huge deliberate loopholes – allowing the North Sea oil and gas giants off the hook and avoiding billions in taxes if they stepped up investment in more oil and gas production. 

This is totally wrong. There should be no loopholes for these profit-hungry energy giants. We certainly should not be giving them incentives to invest in more oil and gas fields, when the priority should be getting rid of our dependence on fossil fuels. For example, there are plans to develop the Rosebank field, the biggest undeveloped oil and gas field in the North Sea. Allowing this would lock us even further into an expensive, climate-wrecking energy system and delay the transition to renewables that we urgently need.

As progressives, this is a key moment for us to win the fight for a new energy set-up that puts the interests of society over Shell and the like. 

The immediate demand must be for the Windfall Tax to be hiked so that North Sea oil and gas giants don’t make a single penny in excess profits off the back of higher energy bills for ordinary people. 

Last year I launched, along with the Labour Assembly Against Austerity, a petition demanding this. Over 80,000 people signed it and we need to step up our campaigning on this. 

Such a move could raise vast sums to help people struggling with their bills right now. Labour’s analysis suggests that an additional £13bn could be raised in just two years by closing the Windfall Tax loopholes, increasing its rate to the level of taxes paid on North Sea oil production in Norway, and by backdating the start of the Windfall Tax. 

Beyond that, we need a fundamental change in our energy system so that it serves people and the planet.

That means ending our reliance on oil and gas. 

Labour’s proposal to retrofit 19m homes so all have a high standard of energy efficiency would slash our dependence on gas imports and lower household bills for the long term, saving an estimated £1,400 per year on current sky-high bills. 

It also means huge investment is needed in renewables. This can’t be achieved by leaving our energy system in the hands of the same fossil-fuel giants that dominate the current market. 

As the Common Wealth think tank recently highlighted, in the fourth quarter of last year, Shell invested just £871m on its so-called “renewables and energy solutions” which is less than half of what it spent on marketing alone and a tiny fraction of the £5bn they handed to shareholders.

Instead, a real green transition requires us to bring the energy system into public ownership, a move that is backed by two-thirds of the population who are sick of being ripped off. Renewable energy is not only cleaner but is now much cheaper than fossil fuels.

At every stage, from production to distribution, our current private energy market is all about making a quick profit. 

For example, privatised energy distribution companies, whose pylons and cables deliver electricity from power stations to homes, have higher profit margins than any other sector of the British economy. No wonder Britain has the highest electricity bills in the world.

Labour’s plans to create Great British Energy – a publicly owned clean energy generation company – and its commitment for zero carbon power by 2030 are positive steps away from this broken, dirty energy market we now have.

With public anger at our privatised energy system higher than ever, now is the time for all of us to be stepping up the fight for an energy system fully in public hands so we can put people and planet before profit.

  • Richard Burgon is the MP for Leeds East, the Secretary of the Socialist Campaign Group of MPs and a regular contributor to Labour Outlook. You can follow him on Facebook, Twitter and Instagram.
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Featured image: Richard Burgon addresses the House of Commons ©UK Parliament_Jessica Taylor

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