SHELL’s chief executive threw his weight yesterday behind growing demands from the oil industry for Gordon Brown to rethink his £2 billion-a-year tax raid on the North Sea if crude prices continue to fall from near-record levels.
Jeroen van der Veer renewed warnings that the Chancellor’s decision in December to double supplementary corporation tax on North Sea producers from 10 per cent to 20 per cent could undercut investment in Britain’s declining oilfields.
Mr van der Veer said that ministers should commit themselves to scrapping the increase if oil prices decline. “If we see that kind of commitment, so that if oil prices fall, then the tax is reversed, that would support conditions (for) additional investment in the North Sea,” he told a conference in London.
The comments came after Lord Browne of Madingley, BP’s chief executive, made a similar call last month. “The tax should be removed as prices come down,” he said then. “If there was no justification for a windfall tax a year ago, there would clearly be no justification for taxation if prices come back to that level.”
The Government has rejected the pleas and insisted that the tax rise was justified and would not be altered during the present Parliament. Malcolm Wicks, the Energy Minister, has said that the tax move struck “the right balance between oil producers and consumers, by promoting investment and ensuring fairness for taxpayers”.
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US crude yesterday fell back below $61 a barrel for the first time since the start of January.