My thoughts in Conservative Home on a windfall tax on North Sea oil:
Extract:
The North Sea windfall tax is proving a headache. The Cabinet is rumoured to be split: Kwasi Kwarteng (needing investment) is in firm opposition, whilst Rishi Sunak (needing revenue) seems not to have ruled it out.
Labour, meanwhile, finally has a policy to attract householders reeling from soaring bills. And in Aberdeen, where things are actually supposed to happen, confusion reigns.
Since the taps started flowing in sixties, the North Sea has coughed up over £300 billion in tax revenues. (Unsurprisingly, opinions vary somewhat on how well it has been spent.) In that time, successive chancellors have adjusted the offshore tax regime in response to global oil price movements that they can’t predict, let alone control.
But what is the impact of constant tweaking – and are there alternatives which could deliver higher returns? And perhaps even de-politicise the issue?
