Energy Profits Levy

Baroness Sheehan Excerpts

Tuesday 7th February 2023 Lords Chamber

[Baroness Penn (Con)]

I am sure the noble Lord would not want to conflate the global profits of those firms with the profits they have derived from their UK oil and gas production. As I have said, those are subject to a tax of 75%. We expect the combined tax take from North Sea oil to be £80 billion over the coming years. We think it is right that we have the investment allowance. The sector is made up of many different players and supports 117,000 jobs, around a third of which are in Scotland—jobs I would have thought Labour would want to support.

[Baroness Sheehan (LD)]

My Lords, the US Inflation Reduction Act offers $216 billion of tax credits to green investments in energy and transport, and the EU will make a similar offering. In contrast, we now have an inexplicable regime, with 91% investment relief for oil and gas companies and zero investment relief for clean power generators. Why is UK green investment being shackled?

[Baroness Penn (Con)]

I simply cannot agree with the noble Baroness’s interpretation of things. Many renewable electricity generators generate their electricity under contracts for difference, to which that regime does not apply. It applies only to exceptional profits related to the price of gas, and is nothing to do with the cost of investing in renewables. I can agree with the noble Baroness on the importance of investing in renewables, something on which we have a consistent track record. We have the largest wind capacity in Europe, and we are the second-largest deployer globally, behind only China. We have a lot more to do, but we have a strong track record on which to build.