MPs slam Brown over tax on oil profits
Chancellor Gordon Brown's decision to impose a new 10% levy on North Sea oil profits has come under furious attack from opposition MPs, particularly Scottish Nationalists.
The Scottish MPs sounded out Brown for breaching understandings the oil industry had, following a review of North Sea taxation, that their tax environment would remain stable.
SNP Westminster Energy spokesman Mike Weir said the United Kingdom Offshore Oil Operators Association had warned that the move ‘could undermine investor confidence in the long term viability of the North Sea’.
SNP Westminster leader Alex Salmond complained: ‘The new 10% tax on the North Sea industry was wholly unexpected and flies in the face of assurances given by New Labour about no tax rises.’
And Gordon Liberal Democrat MP Malcolm Bruce said it was ‘a breach of faith’ which could undermine the industry’s confidence in the Treasury.
But Scottish secretary Helen Liddell, a former Energy minister, said the understanding purely related to Petroleum Revenue Tax, which was not being altered, and denied bad faith.
In support, Labour MPs said it was right, on balance, to tax companies whose recent large oil profits related to fluctuations in the World price for oil rather than investment in North Sea development.
