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George Osborne gave the oil industry further subsidies in the budget to keep them afloat. I thought Maggie was against propping up failing industries? :confused
Is the oil industry in danger of enjoying subsidy creep year -on-year only to have it taken away in the future like with the coal industry without a proper transition plan to adopt wholescale renewables? :confused
Have you not realised the multi faced side of the tories can change without a grimace, an appeasement to the SNP possibly or a bit of creeping/bribing to the Scottish electorate maybe who knows. But do not be fooled.Quote:
Originally Posted by Rheghead
I thought it was Sturgeon begging Osborne?
So no wonder Osborne said:
"We are only able to provide this kind of support to our oil and gas industry because of the broad shoulders of the United Kingdom.None of this support would have been remotely affordable if, in just eight days’ time, Scotland had broken away from the rest of the UK, as the nationalists wanted.Their own audit of Scotland’s public finances confirms they would have struggled from the start with a fiscal crisis under the burden of the highest budget deficit in the western world.Thankfully, the Scottish people decided that we are better together in one United Kingdom"
The dent to the Scottish economy because of oil prices only amounts to 1%. That is why the Green Party boldly saw that Scotland will greatly benefit through investment in renewables....and still does.Quote:
Originally Posted by bekisman
I thought Margaret Thatcher was abhorrent to subsidising uncompetative industries? :confused
A report is out on the subsidies given to the oil industry by the UK government. As a Green I am against boosting oil production for no gain in tax revenue. However, it may go some way to explain how Norway is able to balance the books but the UK government is not if it is prepared to give away tax breaks for the oil industry with a similar amount of production. Is the oil being mismanaged?
Quote:
The UK does not have a spending
problem, it has a revenue problem.
There is a lack of political will to
collect the taxes that should be paid
by large corporations to support the
general welfare and a brighter future
for all UK residents and businesses.
http://static1.squarespace.com/stati...13+Low+Res.pdfQuote:
While
the UK government continues to
push austerity measures and cuts to
essential services, it is estimated that
nearly £120 billion in potential tax
revenue was not collected in 2014.
This amount was larger than the
entire UK NHS budget.
There's a big difference between a subsidy and a taxation policy. With a subsidy, money is GIVEN to an industry from government, with a tax incentive the government TAKES less. There's a big difference.Quote:
Originally Posted by Rheghead
I wouldn't disagree with that stance. But as well as tax revenue the oil fields keep thousands of people in work. If the companies pull out to work in cheaper areas of the world then these jobs may be lost. There's more to this debate than direct taxation of the oil companies.Quote:
Originally Posted by Rheghead
I find it hard to compare the UK to Norway with roughly 13 times as many people, but similar amount of oil.Quote:
Originally Posted by Rheghead
Again, if the UK had 13 times more oil than Norway, to match the difference in populations, I'm sure we could balance the books too.Quote:
Originally Posted by Rheghead
Difficult question.Quote:
Originally Posted by Rheghead
It's that mix between direct taxation and maintaining employment and investment.
Oil is an international business and the companies will only operate where they want to. Make it too expensive and they leave, along with their investment and jobs.
It's easy to target the oil companies. That's true. But they keep something like 400,000 taxpayers in work and maintain high skill levels in this country. Yes they get tax breaks to encourage their investment, but they get no subsidy.
I've personally got a bigger problem with Amazon receiving over £10,000,000 in direct subsidies from the Scottish government, paying virtually NO TAX and employing a few hundred low skilled, low paid workers, many on zero hours contracts.
http://www.scotsman.com/news/opinion...land-1-1994067
There is no effective difference between a tax break and a subsidy. It is the same thing. The net effect is the same, you are reducing the tax revenue that could be used for public services in order to reward a company.
£120 billion is a lot of money to not claim against the oil industry, even for UK, it is twice the UK deficit.
I disagree.Quote:
Originally Posted by Rheghead
There's a big difference.
The net effect is only the same if you make the ridiculous assumption that the same amount of oil would be produced whether the tax break was given or not.
Companies only produce oil when it is economically viable to do so.
If the tax incentives for offshore oil were not there, the oil would not be produced. There would be no oil income and, as a double whammy, hundreds of thousands of more people unemployed.
Not good for the country at all.
So there's no subsidy at all?
Why do I even open these stupid threads!
Before discussing further, based on what the media have been telling us, here are some interesting facts.
The UK’s North Sea oil revenues: Giving it away?
The Actual Report.
Shell paid the Norwegians £2.7 billion in tax revenues and they are still out there pumping oil out. We gave them £80million and a tax break. The key thing is that the oil has suffered the same in price for the Norwegians as it has for the UK.Quote:
Originally Posted by theone
http://i48.photobucket.com/albums/f2...ps3tz57ij4.png
Unfortunately, once again, this is like comparing apples to oranges.Quote:
Originally Posted by Rheghead
Shell has high profit, low cost fields in Norway. Monster new fields such as Ormen Lange whereas is the UK it is largely old, low yield fields. Indeed, Shell is selling off much of its UK operated portfolio this year. https://www.theguardian.com/business...aor-linda-cook .
It also has large decommissioning costs for the Brent field, and others, that eats into the (taxable) profits. They're also investing heavily in future UK infrastructure projects, they've invested several £Billion into the West of Shetland which obviously reduces current taxation (but will allow for more in future).
We'd have to see figures of cost/turnover/investment and profit for each country before giving a realistic comparison.
I'm not for a second promoting tax avoidance, just that there's a fine line between promoting investment and hurting it.
Absolutely nothing wrong with tax avoidance at all.
I agree. But often the laws and regulations that allow the avoidance are questionable.Quote:
Originally Posted by mi16
Yeah, pull the other one, oil extraction in the North sea is different for Scotland than it is for Norway. Norway does demand taxes from its oil industry. That is the only difference.
Oil production from new fields is the same in the UK and in Norway. Relatively easy and cheap.Quote:
Originally Posted by Rheghead
Oil production from old fields is the same in the UK and in Norway. Relatively difficult and expensive.
Shell has a large number of new fields in Norway. Shell has a large number of old fields in the UK. Life extension projects. Decommissioning. Hence why profits (and therefore taxes) in Norway are higher.
The taxation system in Norway for offshore oil is remarkably similar to the UK. Companies have their investment in new fields and infrastructure offset against profits from existing fields.
Before looking at the "taxes paid" figure, you really need to look at the expenditure and turnover figures to make a real assessment of the situation. Shell has spent BILLIONS over the last few years, expenditure they committed to making before the oil price crashed.
The taxation will follow as the new investments start producing.
Just in time for a newly Independent Scotland to reap the rewards... :cool:Quote:
Originally Posted by theone
If you were a taxpayer, you'd understand.Quote:
Originally Posted by Rheghead
Now I hadn't thought of that but now that you have mentioned it, I think you could be right.Quote:
Originally Posted by Alrock
Tax avoidance schemes in the North Sea oil industry exposed.
http://www.maritime-executive.com/ed...chemes-exposed