Tom Greatrex MP, Labour’s Shadow Energy Minister, has commented on the news that the UK government will consult on the North Sea tax regime.
Statement
“It is vital that we have the right regulatory and fiscal framework to get the most from our declining North Sea resources. Current levels of investment are expected to halve over the next four years – increasingly, North Sea operators will have to do more with less. That is why Sir Ian Wood's recent report has been broadly supported.
“It will always be for the government of the day to decide on its fiscal regime, but what should not happen again is the type of unannounced changes from George Osborne in his 2011 budget, whose consequences are still being felt. Instead, where there are real challenges to address, then the framework needs to be properly assessed. The introduction of marginal field allowances by Alistair Darling is an example of a tax change which brings an overall benefit to industry and taxpayers.
“What is clear is that whatever the outcome of this consultation, the fiscal regime for the North Sea needs to be consistent and coherent across the UK continental shelf. The Wood Review makes clear that in the mature basin of the UKCS, there must be greater cooperation and coordination in the North Sea to secure maximum economic value, not the fragmentation of the fiscal, regulatory and health and safety regimes that would inevitably follow any decision to leave the UK. With oil resources, by definition, declining and revenues, by record, declining, it makes no sense to break that up."
Adapted from press release by Katie Woodward