Windfall tax on oil giants won’t hurt British pensioners, thinktank finds
Britain’s main pension funds own less than 0.2% of Shell and BP shares, undermining claims that a windfall tax on big oil companies would harm the retirement incomes of UK savers.
A review of the oil giants’ shares by the Common Wealth thinktank shows the largest holdings are by US investment companies, including BlackRock and Vanguard, and the wealthy Norwegian pension funds. The UK’s multibillion-pound defined contribution occupational pension funds, which hold the savings of tens of millions of workers, rank among the least important investors after decades of spreading their investments in different markets around the world.
Last week, oil industry supporters defended the government’s refusal to levy a windfall tax on North Sea oil firms, including BP and Shell, by saying it would force them to cut investment and dividend payments to shareholders. BP chief executive Bernard Looney, announcing record quarterly profits of £5bn last week, said plans for “up to £18bn worth of investment” over the next eight years would go ahead even if there was a windfall tax on the companies profits. He said £2.5bn would be spent buying back shares to boost their value.
Shell also reported a record quarterly profit of £7.3bn for the first three months of the year, piling further pressure on the government to use a windfall tax to fund special measures to tackle soaring household energy bills.
Rishi Sunak, the chancellor, who has resisted attempts by No 10 to pay for extra support with higher government borrowing, has hinted that he is considering a tax on oil companies, although business secretary Kwasi Kwarteng is understood to be against the idea.
Nick Butler, a visiting professor at King’s College London who spent almost 30 years as an
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