Written Question
Friday 24th February 2023
Asked by:
Lord Mackinlay of Richborough (Conservative - Life peer)
Question
to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department has made a recent assessment of the potential impact of the Energy Profits Levy on independent North Sea oil and gas companies.
Answered by James Cartlidge
- Shadow Secretary of State for Defence
The Energy Profits Levy (EPL) was introduced in May 2022 in response to sharp increases in oil and gas prices over the past year. At the Autumn Statement 2022, the Chancellor announced that the rate of the levy would rise by ten percentage points to 35% from 1 January 2023 and will last until 31 March 2028.
The government has been clear it wants to see the oil and gas sector reinvest its profits to support the economy, jobs and the UK’s energy security. That is why the levy includes a new investment allowance, ensuring that for every £1 an oil and gas company spends, they can claim around 91p in tax relief for most types of investment expenditure.
For every £100 an oil and gas company invests to decarbonise upstream oil and gas production, they will be able to deduct £109.25 when calculating their levy profits. This provides an immediate and significant fiscal incentive to reinvest profits in the UK.
The government published a Tax Information and Impact Note (TIIN) on the Energy Profits Levy changes announced at the Autumn Statement. This is available at: https://www.gov.uk/government/publications/changes-to-the-energy-oil-and-gas-profits-levy/energy-oil-and-gas-profits-levy. The TIIN sets out that the levy is not expected to have a significant macroeconomic impact on the level of business investment.
In December 2022, the Chancellor attended a roundtable with representatives from the oil and gas sector. The government has regular engagement with a range of stakeholders, including independent oil and gas companies operating in the North Sea, and I have also met with representatives of North Sea Oil and Gas.
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"May I offer the Chancellor my congratulations on his growth plan? He will know of my interest in tax; the Register of Members’ Financial Interests will show it. I am delighted to see lower and simpler taxes. I think it is fair to say that the Conservatives’ inheritance of the …..."Lord Mackinlay of Richborough - View Speech
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Speech in Commons Chamber - Mon 11 Jul 2022
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"I was asked on 26 May by one of the main newspapers what I thought about this proposal of a windfall tax, on the back of what Labour had proposed some time before. I gave this fairly high-octane statement:
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Speech in Commons Chamber - Mon 11 Jul 2022
Energy (Oil and Gas) Profits Levy Bill
"The hon. Gentleman has merely clarified what I have been trying to say; yes, of course there were supranormal profits on the back of Ukraine war and coming out of covid, when the entire planet was getting its factories back up and running and life was returning to normal. I …..."Lord Mackinlay of Richborough - View Speech
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Speech in Commons Chamber - Mon 11 Jul 2022
Energy (Oil and Gas) Profits Levy Bill
"I am saying very clearly that big companies can make investments anywhere they please in the world, perhaps with tax regimes that are more suitable to them and where they are not being taxed at 65%. I would rather that they were investing here and staying here than going abroad …..."Lord Mackinlay of Richborough - View Speech
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Speech in Commons Chamber - Mon 11 Jul 2022
Energy (Oil and Gas) Profits Levy Bill
"Thank you, Dame Rosie, for clarifying that. I think that we will find that the hon. Member for Aberdeen South (Stephen Flynn) was being a touch facetious...."Lord Mackinlay of Richborough - View Speech
View all Lord Mackinlay of Richborough (Con - Life peer) contributions to the debate on: Energy (Oil and Gas) Profits Levy Bill
Speech in Commons Chamber - Mon 11 Jul 2022
Energy (Oil and Gas) Profits Levy Bill
"I had not developed a point, but, please, make an intervention...."Lord Mackinlay of Richborough - View Speech
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Speech in Commons Chamber - Mon 11 Jul 2022
Energy (Oil and Gas) Profits Levy Bill
"Let me take a couple of those points. The hon. Lady makes the point that tax rates on the oil and gas industry are higher elsewhere in the world. Well, that may be the case. I know that some will be fundamentally opposed to the whole concept of being energy …..."Lord Mackinlay of Richborough - View Speech
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Speech in Commons Chamber - Mon 11 Jul 2022
Energy (Oil and Gas) Profits Levy Bill
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Speech in Commons Chamber - Mon 11 Jul 2022
Energy (Oil and Gas) Profits Levy Bill
"If I may, Dame Rosie, I will address the hon. Lady’s questions. On international markets, I do not know any more about economics than this: if we add more capacity to any system, the price should drop. Even if her view of economics holds water and the price does not …..."Lord Mackinlay of Richborough - View Speech
View all Lord Mackinlay of Richborough (Con - Life peer) contributions to the debate on: Energy (Oil and Gas) Profits Levy Bill