Yesterday’s announcement by Sunak was far from destructive for the North Sea oil & gas industry given the generous projects investment tax relief, but it fails, as it turns out, in at least one critical way.
There is no provision to encourage Big Oil to actually fast-track its low carbon investments: green hydrogen, offshore wind, etc., though presumably turbines associated with oil & gas field infrastructure fall within the new allowance.
However, given the level of online benefits fraud in the news yesterday – some £5.6billion’s worth – this tax grab should never have been necessary if the DWP did its job properly.
That said, BP should accept the levy situation but quietly kick down the Treasury’s doors. To protest loudly will lead to the Great British Public getting even angrier than it already is.
BP has big low carbon plans. It wants to become a low carbon leader (which it most certainly is not at this time).
Early today (Friday), the impression was that Shell had shrugged its shoulders; but that seems not to be the case judging by a statement from the company.
The reliefs announced yesterday are specific to oil & gas. Why not additional up-front reliefs for low carbon for both Big Oil and Big Renewables.
The Treasury must not damage the current and accelerating push towards green energy in the UK.
Meanwhile, the O&G industry, having broadly accepted what has happened, should collectively warn the Treasury that enough is enough. They probably will anyway.
They’ve always lived with uncertainty; never haven’t. That is the way of oil & gas.
Of course, there are other industries out there where Sunak should hold their feet to the fire and make them pay tax in the first place.
And if they refuse, then show them the door.
Then there’s the issue of the super-rich, What can I, a humble prole, possibly say…