The UK Government has come under pressure to ensure that platform electrification is included in the North Sea investment relief programme.
Stephen Flynn, SNP MP for Aberdeen South, told Lucy Frazer, financial secretary to the Treasury, that large renewables projects “must be a part” of the government’s energy profits levy.
After much humming and hawing, Westminster finally decided to slap the North Sea with a windfall tax last month.
The measure aims to raise around £5 billion this year to help households with the soaring cost-of-living.
As a sweetener the Chancellor announced a near-doubling of the investment allowance to 80% in an effort to incentivise companies to splash the cash.
Taken with other measures, it means North Sea firms will get 91 pence back per £1 spent for a total relief rate of 91.25%.
There has been criticism though that the allowance does not cover spend on low carbon projects.
In a question to the finance secretary in Westminster, Mr Flynn said: “Jeremy Cresswell, the emeritus editor of Energy Voice in the north-east, highlighted his concerns that the investment allowance put in place by the UK Government is directly for Big Oil, as opposed to Big Renewables too.
© Supplied by Parliament.tv“Can I get clarity from the minister in relation to an earlier point that electrification could be part of this programme – surely it’s a must be part of this programme.”
In response, Ms Frazer said: “Yes, it could be and I’m sure that HMRC will consider those reliefs when they are made. I hope that it is, but the position is that it could.”
Speaking after the debate, Mr Flynn said: “The Minister was unable to provide any clarity on the investment allowances contained within Rishi Sunak’s windfall tax announcement and that’s an issue because industry needs to know whether renewables projects are to be included.
“On the basis of the Ministers answer you can’t help but think that these plans are half-baked at best and, more worryingly, there seems to be a lack of urgency to get this right – let’s not forget that any move that could stifle investment in renewables puts a barricade in front of Aberdeen’s long term future.
“The UK Government has it in its gift to put this right by encouraging expansion across the sector and I will continue to press them to act as soon as possible.”
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