Rachel Reeves should scrap the North Sea windfall tax now
The chancellor’s failure to reform or remove the energy profits levy (EPL) – AKA the North Sea windfall tax – in her spring forecast was a case of “political expediency and more to do with putting one byelection result before the economic needs of the country”,Who said that? Some Tory or Reform politician being opportunist as war in Iran puts the UK’s energy import dependency in the spotlight?Actually, no, it was the general secretary of the GMB union, Gary Smith, on Wednesday, demonstrating once again that views on the North Sea oil and gas do not fit neatly into a left-right divide,He has been making the principled case for an orderly transition in energy for ages, warning that decarbonising via deindustrialising costs jobs and will end up pushing voters rightwards,As it happens, one suspects Rachel Reeves’ silence on the EPL in her statement – despite heavy Westminster rumours that something was in the offing – was probably also motivated by war in Iran and spikes in the prices of oil and gas,It is harder, politically speaking, to reform a windfall tax if there is a chance that windfall conditions are returning.
But Reeves knows this issue is not going away.The question of what volumes the UK should extract from the North Sea during an age of energy transition is now at the centre of the energy debate.It’s no use parroting, as Labour frontbenchers tend to do, that “more North Sea oil and gas won’t take a penny off bills”.That statement is true but misses multiple points: the case for a rethink on North Sea policy is about jobs, skills, the competitiveness of UK industry, revenues for the Treasury and security of supply.Nobody pretends the production dial would go back to the 1990s if Labour loosened the windfall regime to incentivise more “tieback” developments in the North Sea – those on, or near, existing fields that Ed Miliband, energy secretary, sanctioned last year.
Imports are a fact of life in all circumstances given the natural decline of the North Sea basin.This is really a question of what proportion should be produced domestically of the oil and gas that the UK will consume on the way to net zero in 2050 – should it be a quarter, which is the rough current trajectory, or would it be better to aim for a half or some figure in between?Greg Jackson, chief executive of Octopus Energy – a big renewables fan, note, as well as being a non-executive director at the Cabinet Office – put it accurately on the BBC this week: “While we are still dependent on gas, I can’t see any problem with getting more from the North Sea – but it would be a drop in the ocean.What you would have is more British companies paying more tax, which would help in times like this.”That does indeed seem the calm-headed approach: do the renewables and do the nuclear developments to clean up the grid and enable electrification in the rest of the economy.But also optimise North Sea production – especially gas – in the knowledge that the output is less carbon intensive than imported liquefied natural gas (LNG) that is transported halfway around the world in diesel-powered ships, and sometimes from countries stuck behind the strait of Hormuz pinchpoint.
The EPL was introduced by the last Tory government after Russia’s full-scale invasion of Ukraine in 2022 and has survived even as every other European country has removed their equivalents.It puts the effective tax rate on North Sea production at 78%, which is why industry complaints that it is internationally uncompetitive and deters investment are credible.The evidence is in the investment numbers and factory closures in industries such as chemicals, where the boss of its trade association warned again on Wednesday that it is “in the fight of its life here in the UK, as it battles against an extended period of depressed global demand and, I regret to say, hostile government policy”.Reeves has a ready-made reform in her pocket if she wishes to use it.It is her intended successor to the EPL, now due to expire in 2030: the Oil and Gas Price Mechanism which would impose windfall-like charges when market prices hit higher thresholds than under the EPL – $90 a barrel for oil and 90p a therm for gas.
Early introduction would go some way to addressing the mounting anger in heavy industry and among trade unions,Instead of clarity, Reeves’ meeting on Wednesday with oil and gas bosses yielded this cryptic statement from a government source: “The chancellor was clear with industry that she wants the EPL to come to an end,She has made that promise and she stands by it,Indeed, it was a commitment she wanted to make this week,But the crisis in the Middle East has had real-time consequences on oil and gas prices and it is right that we respond to this.
”What does “come to an end” mean? That the EPL will definitely go early when prices fall? It would be better to say it out loud now,
Jon Stewart on US attacks in Iran: ‘A war with no clear purpose, no end in sight’
Late-night hosts delved into the new US regime-change war in the Middle East, after Donald Trump directed the US military to bomb Iran in conjunction with Israel.Jon Stewart opened The Daily Show on Monday in a daze, after Iran state media confirmed that US and Israeli forces killed its supreme leader, Ayatollah Ali Khamenei, over the weekend. The host joked that, for the surprise occasion and chaos that followed, he needed to bring back “a 20-year recurring segment” titled “Mess O’Potamia”.“America, apparently, had to start an entire war to kill an 86-year-old man in ill health and not wait – I don’t know – three weeks to let saturated fat do its thing,” he joked.He then played a clip of Trump, wearing his USA hat, announcing the so-called “Operation Epic Fury” against Iran from his luxury golf course in Florida
‘My guitar was mangled – like my life!’ Goo Goo Dolls on how they made epic ballad Iris
‘I’m grateful to Taylor Swift, and others who have covered it, for introducing the song to a new generation. Three billion streams on Spotify is astonishing!’I was going through a divorce and living in a hotel in West Hollywood when my manager said Warner Brothers were seeking songs for the movie City of Angels. They already had U2, Peter Gabriel and Alanis Morissette, so I thought getting a track on there would draw attention to us. Warners showed me the film and it was like Wim Wenders’ Wings of Desire. They wanted a song for the scene where the angel – played by Nicolas Cage – decides to become human to be with the woman he loves
My cultural awakening: Leonardo da Vinci made me rethink surgery – I’ve since mended more than 3,000 hearts
For one heart surgeon, seeing the Renaissance artist’s anatomical drawings gave him a natural understanding of the body that was often overlooked in modern medical scienceIf you’d asked my teenage self, growing up in a small village in Shropshire, what I wanted to do with my life, I would have talked about art and music long before I spoke of scalpel blades and operating theatres. As an 18-year-old, I intended to go to art school, until my mother sat me down and told me rather bluntly that being an artist wouldn’t earn me much money. As she spoke, a surgical documentary flickered across the screen of the black-and-white television in our living room. I told her, half joking, that that was what I’d do instead. Which is how I ended up repeating my A-levels and fighting my way into medical school, where I qualified in 1975
The Guide #232: From documentary shock to Bafta acclaim – how the screen shaped our understanding of Tourette’s
The wildfire surrounding last week’s Bafta ceremony – where Tourette syndrome campaigner John Davidson involuntarily shouted a racial slur at actors Michael B Jordan and Delroy Lindo, and the BBC aired the moment – continues to rage. Criticisms have been levelled at, and investigations opened by, the Beeb and Bafta; hundreds of news stories and comment pieces have been devoted to the incident (if you read anything, make sure it’s this clear-eyed piece from Jason Okundaye, who was at the ceremony); and the climate on social media has been toxic, with much of the ire directed at Davidson himself. It’s an ire that is based on a complete misunderstanding of coprolalia, the form of Tourette syndrome (TS) that Davidson has, which results in the unintended and completely involuntary utterance of offensive or inappropriate remarks.There’s an unhappy irony at play here because Davidson, arguably more than any other person in Britain, has been responsible for raising awareness of TS. There’s an unfortunate symmetry, too, to the fact that the incident was shown on primetime BBC, because that was where Davidson was first brought to national attention as the subject of the landmark 1989 documentary John’s Not Mad
From The Testament of Ann Lee to Gorillaz: your complete entertainment guide to the week ahead
Amanda Seyfried is Shaker all over in a wild period drama, while Damon Albarn and his cartoon cohort return with a polyglot offeringThe Testament of Ann LeeOut now In Mona Fastvold’s critically acclaimed drama, Amanda Seyfried shakes things up as the founder of the restorationist Christian sect the United Society of Believers in Christ’s Second Appearing. More commonly known as the Shakers, the egalitarian ecstatic worship group coalesced round the visionary female leader in the 18th century.Scream 7Out now The Kevin Williamson-scripted Scream films (1, 2, 4) are probably the best in the franchise, and this time he not only writes but directs the antics of Ghostface et al. Neve Campbell, David Arquette, Matthew Lillard and Courteney Cox all make appearances, regardless of whether you thought their characters were dead or not.SirâtOut now In the deserts of southern Morocco, a man searches for his missing daughter, enlisting the help of a group of partygoers who tell of a rave deep in the desert where perhaps she can be found
Pulp have the last word in Adelaide festival saga with triumphant opening gig
Britpop rockers wow crowd and say all voices are ‘important’ in wake of Randa Abdel-Fattah controversyGet our breaking news email, free app or daily news podcast“All voices are important,” the Pulp frontman Jarvis Cocker told an adoring crowd in Adelaide on Friday. “All voices should be heard.”Message received. At one point Pulp had pulled out of the opening gig at the Adelaide festival over the Adelaide writers’ week (AWW) furore.But they turned up, they wowed the 10,000-strong crowd, and while Cocker didn’t explicitly say his comment was a reference to the brouhaha around AWW, it was pretty clear
Formula One 2026: team-by-team guide to the cars and drivers
Why Norway beats us hollow at sport | Letters
Scotland hoping to party like it’s 1999 and thwart France’s title ambitions
Harry Brook backs ‘awesome’ England to find a way past India into T20 World Cup final
Dennis Cometti was erudite, funny and engaging. His witticisms could fill a library | Jonathan Horn
The Spin | Going for gold? Why China’s female cricketers may benefit from Olympic aim