Shell and BP haven’t paid tax on North Sea operations for three years

Georgina Andrews is a member of the YCL’s Merseyside branch

It has emerged that Shell and BP, which produce 1.7 billion tonnes of greenhouse gases a year in total, have not been paying corporation tax on their operations in the North Sea for the last year, according to company filings.

The companies, which produce five times the amount of annual greenhouse gas emissions that Britain does, have benefitted off of tax breaks and relief for oil and gas production, handed on a platter by the Tories. 

Between 2018 and 2020, the oil giants paid no corporation tax or production levies on North Sea oil production and claimed nearly £400 million in tax reliefs.

During this time, shareholders were also paid £44 billion in dividends.

After tax cuts to encourage oil production, the North Sea is now one of the most profitable places in the world for oil and gas production.

Shell and BP have said that they will invest in greener energy to meet their target of zero carbon emissions by 2050 but have also promised to continue oil and gas production in the North Sea. 

The UK government is currently being challenged in a high court case for its poor tax regime against the likes of Shell and BP. The activists bringing this case against the government are demanding an end to payouts and a ban on new projects in the North Sea. 

Research by Rystad Energy earlier this year demonstrated that the UK is the most profitable country in the world for oil and gas production with some of the lowest oil tax rates globally. 

The Business Secretary, Kwasi Kwarteng, is also facing legal challenges as activists claim taxpayer handouts to oil companies are unlawful because it contradicts the UK’s pledge to achieve net zero carbon emissions by 2050. Before the new year, a judicial review is to be heard. 

It has also been revealed that the sector is looking to open 30 offshore projects by 2025, according to a report published by Friends of the Earth and the New Economics Foundation. 

Shell has had to defend its plans for the Cambo project, a contentious oilfield off the coast of Shetland that contains 800 million barrels of oil and is waiting for approval from the government licensing body, Oil and Gas Authority. 

Never has Engels’ warning rung so true: “Let us not…flatter ourselves overmuch on account of our human conquest over nature. For each such conquest takes its revenge on us.” 

With capitalists’ indifference to environmental costs, we are yet again seeing the hollow truths promised by capitalists be shown for the lies they are by their actions. Capitalists will always chase profits, subjecting the working classes to torment and displacement, before upholding a pledge, and their lackeys, the Tories, will do everything to aid them. 

Britain’s ecosystems are already infertile due to the pillaging of natural resources for profit yet capitalists see fit to desecrate the land and seas further. They are killing us with floods, displacement, skin cancer (from ozone depletion) and much more, and have been for decades. Any promises for 2050 are simply too late.

Georgina Andrews

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