Tax plans spell trouble in the North Sea

Labour’s tax plans are whipping up a storm. Are the worries of opponents justified?

A production platform at Brent Oil Field in the North sea
The next few months could prove 'defining for Britain's oil and gas industry'
(Image credit: Michael Saint Maur Sheil / Getty Images)

North Sea oil companies are "accustomed to political meddling", said The Times. But the new Government has made no bones of its desire to impose higher taxes and tougher environmental rules on producers in the forthcoming Budget – to tackle a regime that Environment Secretary Ed Miliband described before the election as having "more holes than Swiss cheese".

The next few months could prove "defining for Britain's oil and gas industry". Miliband has argued that revenue from windfall taxes could help finance Labour's much-vaunted £8bn GB Energy green investment vehicle, which will be headquartered in Scotland. But plenty of Scots are deeply concerned about a policy that threatens the local economy, said Ian McConnell in The Herald. Labour is charging into the sector "like a bull in a china shop". Ministers would "do well to exercise some caution".

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