The UK’s leading progressive thinktank, IPPR, has responded to
the announcement that Shell has made £7.9 billion ($9.8bn) in
profits in the last quarter (Oct-Dec 2022), taking their total
profits in 2022 to £32.2 billion ($39.9bn), and today announced a
new round of share buybacks transferring a further £3.2 billion
($4bn) to shareholders.
Dr George Dibb, head of the Centre for Economic Justice
at IPPR, said:
“Bill-payers will be rightly appalled to hear that oil giants
like Shell are still seeing sky-high profits. Instead of
re-investing those profits in the transition to net zero, they’re
spending billions on enriching their own shareholders and
executives, announcing a further £3.2bn of share buybacks this
morning. The sheer scale of that transfer of wealth - from
bill-payers to shareholders - is inexcusable and demands action
from the government. The UK should follow the example set by the
USA and Canada and fairly tax these share buybacks to raise
hundreds of millions for the exchequer.”
A recent report published by IPPR and Common Wealth
argued that share buybacks are a direct cash transfer away from
households struggling to pay bills, via energy company profits,
to already-wealthy shareholders. The report,
Buy Back Better, contained the
following analysis:
-
Share buybacks channel profits from companies to shareholders by
increasing the value of shareholders’ stock.
- FTSE
100 companies launched £55 billion of share buyback programmes in
2022.
-
President Biden recently introduced a 1 per cent tax on share
buybacks to help alleviate the cost-of-living crisis in America,
and Canada has followed suite by announcing a 2 per cent
tax.
- An
equivalent tax on UK buybacks could raise between £275 million
and £825 million a year, while a windfall tax of 25 per cent
could raise £13.5 billion.
ENDS
NOTES TO EDITORS
- The
IPPR paper, Buy back better: The case for raising taxes on
dividends and buybacks, can be found here: https://www.ippr.org/research/publications/buy-back-better-the-case-for-raising-taxes-on-dividends-and-buybacks
