The chancellor George Osborne handed out £2.7 billion of tax breaks to North Sea oil and gas firms in the last financial year (2013/14).
Our calculations show a big increase in these UK tax breaks, up from an already high £1.95 billion in the year before.
The Government has promised to “maximise the economic recovery of oil and gas” from the North Sea – as well as giving the green light to fracking.
Mr Osborne himself has promised to “extract every drop”.
As fossil fuels get more costly to extract, the Chancellor is slashing the tax payable by oil and gas drilling companies.
This means either more climate changing fossil fuels will be extracted that would have been left in the ground, or more profits for rich oil companies, or both.
The value of the tax breaks is almost as big as the total support given to allrenewable electricity in the same year – £3.1 billion in 2013/14.
Support renewables not fossil fuels
The stated aim of UK and EU climate policy is to keep global temperature rise tobelow 2 degrees.
To have a good chance of this, we can only burn one-fifth of the world’s reserves of fossil fuels.
We urgently need to shift investment away from climate changing oil, gas and coal towards clean energy like solar and wind.
“The chancellor falls over himself to claim renewable energy is expensive, while bending over backwards to offer oil barons massive tax breaks.”
Rather than propping up fossil fuel companies, we believe Mr Osborne should focus on:
• making renewable energy cheaper
• making energy saving more attractive
• stopping his meddling in the UK’s long term carbon reduction plans
All economies, including the UK, must start choosing to leave oil and gas in the ground, not keep on cutting tax to milk every last drop.