UK BUDGET 2016: Oil tax breaks are the wrong course
Response to UK Budget 2016
Oil Change International and Platform criticised Chancellor George Osborne’s announcement today that he will abolish Petroleum Revenue Tax and reduce Supplementary Charge to 10%, for oil production in the UK.
Greg Muttitt, researcher at Oil Change International, commented:
“David Cameron is right that oil subsidies rip off taxpayers. He should rein in his Chancellor, who has just shown contempt for the climate agreement world leaders signed in Paris. Oil companies already paid less tax in the UK than other countries. When public services are being cut across the board, polluting companies are the least deserving of our money.”
Mika Minio-Paluello, Campaigner at Platform, commented:
“Osborne will be remembered as the Chancellor who kept the UK hooked on fossil fuels as the world moved on. We already have shockingly high oil subsidies and tax breaks. The 2016 budget was a chance to make amends and implement a clean energy industrial strategy – Osborne failed the test.”
Notes for editors:
The change reduces the marginal tax rate for all UK oilfields to 40%, compared to the 72% worldwide average (p.31).
Today’s news comes on top of £1.3bn in tax breaks in last year’s Budget. The UK is the only G7 country to significantly increase fossil fuel subsidies in recent years.
At the New York climate summit in September 2014, David Cameron called for “fighting against the economically and environmentally perverse fossil fuel subsidies which distort free markets and rip off taxpayers”. According to the internationally-agreed World Trade Organisation definition, today’s Budget tax breaks for oil count as subsidies.
Earlier this week, Oil Change International and Platform released Oil Tax Facts, showing that:
Oil subsidies and renewables cuts are slowing the clean energy transition
Oil tax breaks do not protect jobs
Subsidy changes are destroying more jobs in solar than saving in oil
The UK oil industry is highly profitable over time
The UK oil industry pays less tax than in other countries