Brexit: NI protocol issue could negatively affect Irish economy

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Business and Energy Secretary Kwasi Kwarteng hailed the announcement as “a clear vote of confidence in the British economy” as the Government attempts to strengthen the UK’s competitiveness, attract investment and generate jobs. Ben Marlow, writing in the Telegraph, hailed the Netherlands’ loss as “firmly Britain’s gain”.

He stated: “Never in the wildest of Brexiteer dreams would anyone have imagined that two business titans – Shell is the second-largest company on the FTSE-100, Unilever the third biggest – were about to pick the UK over the eurozone in quick succession.”

Unilever, which owns household brands including Marmite and Dove soap, called time on its dual Anglo-Dutch structure in favour of a single base in London last year.

Mr Marlow noted Shell’s proposal will be received as “further evidence that Project Fear was precisely that”.

He added: “Even now, Remainers continue to argue that the British economy has been dented by the departure from the European Union but the proof is in the pudding.”

And he observed that the Dutch Economic Affairs and Climate Minister, Stef Blok, said the government was “unpleasantly surprised” by the news.

Mr Marlow said the Dutch have been left contemplating “deep regrets” over Shell’s move and the consequences of the plan for jobs, investment decisions and sustainability.

The Financial Times reported that government officials in the Netherlands are trying to find a majority in the country’s parliament to scrap a 15 percent withholding tax to stop the move.

The tax has been a source of complaint for Shell and its fellow Anglo-Dutch multinational Unilever, according to the FT. The UK does not have a withholding dividend tax.

Shell’s Board announced on Monday a proposal to amend the company’s articles of association in a bid to simplify its share structure and bring it in line with other companies.

The move will increase its competitiveness as well as speed up shareholder distributions and its shift to a net-zero energy business, according to Shell.

Under the proposal, the company would switch from an A-B share structure to a single line of shares, change its tax residence to the UK, hold board and executive committee meetings in the UK and relocate chief executive and chief financial officer roles here.

As a result the Board proposes to change the company name from Royal Dutch Shell to Shell. Shareholders would keep existing legal, ownership and capital distribution rights with the company’s shares continuing to be listed in Amsterdam, London and New York.

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Shell’s corporate governance structure would remain unchanged with the company’s chair, Andrew Mackenzie, maintaining that the simplification will not affect legal proceedings linked to a ruling at the District Court in The Hague.

The court ruled in May this year that the company must cut its CO2 emissions by 45 percent compared to 2019 levels by the end of 2030 in a climate change case filed against Royal Dutch Shell by environmental groups including Friends of the Earth Netherlands.

However, Mr Marlow warns against overstating the importance of Brexit as if it is the “overriding consideration” in every major business decision.

He stated: “In fact it is more just a small part of the story, and in some cases not a consideration at all. Shell’s decision to turn its back on the Netherlands probably says more about its deteriorating relations with the Dutch than it does Brexit politics.”

He described a decision by the Dutch pension fund giant ABP to divest £15billion worth of fossil fuel holdings, including a stake in Shell, as a snub to the company.

Shareholders are due to vote on Shell’s proposals on December 10.

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