The possibility of changes in offshore oil and gas taxation after the general election will be raised today.
Shadow Treasury minister Greg Hands will use a visit to the north-east today to announce that shadow chancellor George Osborne has asked for a review of oil and gas tax policy.
It is being conducted by former Tory energy minister Tim Eggar, with a view to preparing proposals for the Conservative manifesto at the general election.
Mr Hands, who is responsible for oil and gas tax policy, is joining Tory shadow Scottish secretary David Mundell and north-east Tory MSP Alex Johnstone on a trip to Talisman Energy’s Claymore platform with senior company executives.
Mr Eggar — who served in Sir John Major’s government in the early 1990s and is now chairman of the Russo-British Chamber of Commerce, an oil and gas advisory company and other energy businesses — has already begun work on the review.
Mr Hands said: “He is expected to report next year with policy options and possibilities that might inform Conservative policy.
“We want to make sure the tax regime does everything we can to ensure that oil and gas fields in the North Sea are exploited fully.”
He added: “We want to see what tax incentives there might be to ensure recovery from the more marginal fields, as well as doing all we can to encourage extraction from existing fields. We do not want to do anything hasty, or spring surprises on the industry, because we are concerned that all the changes over the last four years mean companies are regarding the UK as unreliable in terms of its tax and regulatory regimes.”
He said the Eggar review would cover the overall level of taxation, including changes in petroleum revenue tax to encourage entrant companies to return to abandoned or “brownfield” blocks with reserves that were once uneconomic to extract.
It would also look at whether tax breaks in the last Budget to encourage extraction from difficult fields are too tightly drawn for maximum effect and requests for up-front help for new entrants who lack a revenue stream against which existing tax relief can be sought.
Talisman Energy vice-president John Forrest said it was “a timely opportunity to discuss issues which are highly important to Talisman and others operating in the UK continental shelf.”
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