North Sea Oil and Gas Producers: Investment Allowances

Baroness McIntosh of Pickering Excerpts

Tuesday 7th June 2022 Lords Chamber

[Baroness Penn (Con)]

I absolutely agree with my noble friend that this measure will not lower the price of gas. In fact, it is by that measure that it is not a subsidy to fossil fuels, but it will provide us with part of the funding to ensure that households across Britain which cannot cope with the extraordinary increase in energy costs at the moment get more support. I also agree with my noble friend that our investment in renewables so far has allowed us to have some cheaper forms of electricity—something we need to continue to build on.

[Baroness McIntosh of Pickering (Con)]

My Lords, has my noble friend the Minister calculated what the income raised by the Treasury has been from excise rates and VAT from North Sea oil and gas produce in the last 12 months?

[Baroness Penn (Con)]

I do not have that number with me for my noble friend, but I might be able to write to her on it. In terms of VAT receipts, there has not been a VAT windfall this year because every extra pound spent on energy at 5% VAT is not a pound spent on other things where VAT is at 20%. So the net effect of increased energy prices in terms of the Exchequer take for VAT is actually negative.