CBI joins growing chorus calling for Osborne to cut N. Sea energy taxes

 

John Cridland, CBI Director-General
John Cridland, CBI Director-General

The CBI has urged the UK government to cut taxes on the North Sea fossil-fuel energy industry as Chancellor George Osborne puts the finishing touches to his Budget later this month.

In so doing, the CBI has become the latest voice calling for the increase to the Supplementary Charge brought in by Osborne in 2011 to be reversed in full (back to 20% instead of 32%)

In its own ‘Budget’ manifesto, John Cridland, CBI Director-General, said: “This would make the UK’s headline tax rates on oil and gas the lowest in the North Sea, alongside The Netherlands.

“With the sharp fall in oil prices our North Sea oil producers are really hurting, with investment in oil fields and highly skilled jobs taking a hit.

“Reducing the tax burden they face at this challenging time could help protect jobs and secure the long-term health of a vital UK sector.”

In January, Sir Ian Wood called for tax changes to help the oil and gas sector to be made within three weeks, warning that delaying until the March budget would be too late as companies prepared to take decisions on future investment plans.

In February Professor Alex Russell, Petroleum Accounting at Robert Gordon University and Chair of the Oil Industry Finance Association, warned that the pace of change from Westminster was “absolutely dire” and accused them of “playing politics” with the industry.

And – as also previously reported in detail in the Scottish Energy News – the head of the industry’s trade association, UK Oil and Gas – also repeated the call for N. Sea tax cuts after it published its 2015 Activity Survey which revealed in depth the economic  carnage caused to N. Sea operators  by the collapse last year in crude oil prices to $50-barrel. See also:

http://www.scottishenergynews.com/n-sea-revenues-dive-to-lowest-on-record-since-1988-as-investment-teeters-on-verge-of-collapse-amid-economic-carnage-of-crude-oil-price-plunge/

MSP Mark McDonald (SNP, Aberdeen Donside) commented: ““The CBI call for action to support the oil and gas industry increases the pressure on the Westminster Government.

 “The case for taking action to support jobs and the long-term prospects of the oil and gas industry has long since become overwhelming, but still Westminster delays and delays.”

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