Budget 2011: A ‘raid’ on UK oil production
Voter pleasing measures announced in the 2011 budget slashing VAT on petrol have enraged energy producers.
The move, put forward by chancellor George Osborne, was part of the Government’s second budget yesterday (March 24).
The move sees a £2 billion-a-year windfall levy placed on North Sea oil and gas production to cover a cut in fuel duty of 1p a litre, which began last night.
Treasury figures estimate the tax will raise around £10.1 billion over the next five years
Budget 2011 reaction
British Gas parent company Centrica’s energy managing director, Mark Hanafin, was disappointed.
He said: “We are disappointed by the Government’s decision to increase further the already high levels of tax on UK gas and oil production.
“With more than 50% of Britain’s gas now imported, it is vital for our energy security and for the economy that investment is maintained to ensure we extract all of the untapped hydrocarbons we can.
“This tax hike could have a chilling impact on future investment in the North Sea.”
Energy focused legal firm Mcgrigors’ head of energy, Bob Ruddiman, said: “It is with considerable surprise that we are faced with an increase in Supplementary Tax.
“This raid on the oil industry and is a serious blow when the industry is working hard to exploit the remaining reserves in the UK Continental Shelf.
“Regrettably, it appears the coalition Government is willing to send a global message that fiscal stability in the UK Continental Shelf cannot be assumed.”