Sat. May 21st, 2022

As chair of a small youth charity now facing a trebling of its gas and electricity bill, I disagree with your leader and find myself in favor of a surcharge on North Sea producers (“Windfall taxes on energy companies are a bad idea”, FT View, March 1). Given the vagaries of profit recognition, a simpler top-line royalty of 2-3 per cent ought to be sufficient, with proceeds ringfenced to help low-income families and charities to pay their utility bills.

This modest charge ought not to impact a producer’s cost of capital, nor would it threaten Big Oil’s strategic pivot to renewables given investment there is opportunity not cash flow constrained and active share buybacks are evidence of surplus capital.

It’s also a good opportunity for Big Oil to burnish its newly discovered environmental, social and governance credentials.

Is that not a win-win?

Fred Lucas
Hogarth Charitable Trust
London W4, UK

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