A North Sea tax windfall should be used to support families, businesses and the energy transition, the UK Government has been urged as new figures reveal a 662% increase in North Sea tax receipts.
Research by Aberdeen & Grampian Chamber of Commerce this week found that offshore operators and licensees have paid an average of £22.1 million in tax per day since the start of 2022, with even more expected to be raised with the introduction of the Energy Profits Levy (EPL), which will increase the effective rate of tax paid by offshore energy firms to 65%.
Ryan Crighton, policy director at Aberdeen & Grampian Chamber of Commerce, commented: “On current trajectory, the tax take from the basin this financial year could be four times higher than the original forecasts done by the Office for Budget Responsibility in 2020.
“Clearly there is sufficient incremental tax revenues to fund the support to consumers and businesses, but also to go further and to inject real pace into the energy transition.”
Crighton added: “We need to deliver the reindustrialisation of Scotland to make sure we capitalise on our green energy potential. These tax receipts provide an opportunity to do just that.”
Speaking to the National, SNP MP Richard Thomson said that while the North-east has historically seen its oil and gas wealth “exploited and squandered” by Westminster governments, this must not be allowed to happen again.
Thomson said: “That money should be going into the pockets of families to help them through the Tory-made cost of living crisis the Conservatives have done little-to-nothing about, and be put back into the North-east to secure jobs and investment for decades to come as part of the Just Transition to renewable energy.
“The UK Government has the opportunity to support the Scottish Government’s efforts to keep jobs and investment in the North East while supporting efforts to hit net-zero, they should grasp that opportunity and reinvest their windfall.”
A UK Treasury spokesperson told the National that it was expected the EPL would raise around £5 billion in its first year from the “extraordinary” profits oil and gas companies are seeing, which will help pay towards the UK Government’s package to help households during the cost-of-living crisis.
The spokesperson said: “The Levy’s investment allowance supports investment on activities to cut emissions, such as electrification, and we are continuing to support businesses through the super-deduction, the biggest two-year business tax cut in modern British history allowing companies to cut their tax bill 25p for every £1 they invest, and by increasing the Employment Allowance.”
