Firms’ tax breaks

The UK Government is providing £750million a year in tax breaks to North Sea oil and gas, despite a pledge five years ago to end fossil fuel subsidies, campaigners say.

A further £414million in public money is going into fossil fuel exploration overseas from Siberia in Russia to Brazil, India and Nigeria, says a report by the Overseas Development Institute and OilChange International.

The organisations accuse the UK Governmentof providing a total of £1.2billion in subsidies a year – despite signing up to a pledge by G20countries in 2009 to phase out fossil fuel subsidies.

Since then, generous tax breaks have been provided to international energy firms to explore in riskier, deepwater fields in theNorth Sea, they claim.

Investment in foreign fossil fuel exploration comes from the Royal Bank of Scotland, 80% owned by the UK Government, and through loans and guarantees through the government’s UK export finance department, the report said.

The Overseas Development Institute’s Shelagh Whitley said: “Despite the widespread perception that renewables are costly, our findings reveal finding new fossil fuel reserves in the North Sea and elsewhere is costing UK taxpayers nearly £1.2billion a year.”