Shell boss calls for energy firm tax to help the poor

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5th October 2022

Bite-sized business news from the UK and beyond

Good morning McDonald's has announced it will release Happy Meals for adults complete with a 'toy' like collectables from fashion brands in the US. Unfortunately for Brits the fast food giant has confirmed they don’t plan to launch the adult version in the UK anytime soon.

Today's stories

Shell boss calls for energy firm tax to help the poor
Greggs defies cost inflation with strong results

ENERGY
Shell boss calls for energy firm tax to help the poor

What happened?
Yesterday the CEO of Shell, one of the world’s largest oil companies, urged governments to raise taxes on the industry to help the poor through the cost of living crisis.

How did we get here?
Governments across Europe are under pressure to protect households from energy prices that have more than tripled in 12 months leading to huge profits for oil and gas sector.

Speaking at an energy conference in London, Shell CEO Ben van Beurden said: "One way or another there needs to be government intervention that somehow results in protecting the poorest… That probably may then mean that governments need to tax people in this room to pay for it.”

Shell later clarified that van Beurden was referring to companies and not wealthy individuals in that statement. The conference was attended by industry heavyweights including Saudi Aramco, ExxonMobil and Chevron.

In May the British government introduced a windfall tax on oil and gas companies that would raise £5bn. This falls short of funding the £150bn package announced last month to cap the price of energy for households and businesses, as a result the support will be debt funded.

Last week the EU agreed to a windfall tax on energy companies with the aim of raising €140bn to redirect to consumers.

Zooming out: Mr van Beurden’s comments will reopen the debate on the controversial topic of windfall taxes. The prime minister has dismissed the idea of extending levies on British energy firms. The argument is that further taxes would discourage investment in renewable energy sources which is ultimately the long term answer to less volatile energy prices.

Other stories to keep you in the loop

Elon Musk agrees to buy Twitter for original offer price of $44bn, legal battle set to end
Average two-year fixed-rate mortgage edges close to 6%
Chip designer Arm’s workforce nearly halves despite SoftBank promise
HSBC mulls ditching Canadian business amid Ping An breakup pressure
Monzo set to give its lowest paid staff £1,000 cost of living payment
Poshmark purchased by Naver in £1.05bn shopping spree
Just 2 customers turn up to order food at Deliveroo's new Oxford Street supermarket
Google-backed $1bn women’s networking firm to launch in UK

RETAIL
Greggs defies cost inflation with strong results

What happened?
Yesterday shares in Greggs jumped 10% after the bakery chain reported a 15% rise in sales in its latest quarter despite multiple price increases.

How did we get here?
Greggs prides itself as delivering value for money food on the go but the rising cost of energy, staff and ingredients has meant its increased prices twice this year with another hike on the way. Some of this cost inflation has been passed on to customers. It’s bestselling product, the sausage roll, is now £1.15, compared to £1.10 in May and £1.00 last December.

These incremental price rises haven’t deterred customers who, with inflation at a 40-year-high, are facing rising costs everywhere.

The retailer is well placed to benefit from a squeezed consumer
Greggs has more affordable breakfast and lunch items compared to rivals like Pret a Manger which will mean it’s easier to attract customers looking to save money.

The chain has opened over 100 stores in 2022 and is on track to add another 50 before the end of the year taking its total footprint to 2,271. It’s aiming for 3,000 shops in the next few years.

Looking ahead: Greggs expects costs to rise 9% this year but has sheltered itself from further inflation in 2023 by purchasing energy and food from suppliers in advance.

Stat of the day

Just 4% of CEOs of Britain's 350 largest public companies are women

Interesting links from around the web

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Shell boss calls for energy firm tax to help the poor

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