The Chancellor Philip Hammond has today announced he will look into further help for the North Sea oil and gas sector, which could include further tax incentives to help keep fields operating for longer.
Shelagh Whitley, Head of the Climate and Energy Programme at the Overseas Development Institute, said: ‘The announcement that the UK will investigate options for further tax breaks comes in spite of warnings about risks of stranded assets from the governor of the Bank of England, and calls from leading investors to phase out all fossil fuel subsidies by 2020.
‘Existing subsidies for oil and gas companies have led to a net cost to the UK government, with £4.8 billion in rebates due between 2015 and 2021. Yet these tax breaks have not been able to protect jobs and undermine the UK’s commitment to phase out fossil fuel subsidies.
‘The Chancellor must acknowledge that the just transition to a low-carbon future offers a much larger economic benefit to the UK than continuing to chase damaging and expensive fossil fuel production.’
Notes to editors
- In February, insurers and investors with more than $2.8 trillion in assets under management called on the G20 to phase out fossil fuel subsidies by 2020
- The 2015 report ‘Empty Promises: G20 subsidies to oil, gas and coal production’, by ODI and Oil Change International found that in 2013 and 2014 the UK provided an average of £5.8bn ($9bn) a year in national subsidies – most of it supporting oil and gas majors
For more information or to arrange an interview with Shelagh Whitley please contact James Rush on [email protected] or +44 (0)7808 791265