England's White Dragon

England's White Dragon
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Thursday, 24 March 2011

Deserter for England with British Budget

Deserter for England with British Budget 2011 As Oil firms
warn jobs will go after tax hike and fuel at the pumps will still go up,

Tens of thousands of jobs in England will go as a result of
a windfall tax on North Sea oil producers announced in the Budget, the industry
has warned.

Mike Tholen, economics director of Oil and Gas UK, said the
change would also damage long-term energy security.

The £2bn tax will fund a fuel duty cut, after a surge in
global oil prices.

Half-wit George Osborne said he would watch fuel prices
"like a hawk" to make sure the oil tax was not passed on to drivers.

He said it was "economically smart" to
redistribute the money from the oil companies - as they saw profits rise as a
result of soaring oil prices - "into the hands of families". (Just a
nice pace of spin by Osborne, as England’s poor and low incomes earners are
already suffering and continue to do so with fuel prices at the pumps of over
£1.43 per litre now at some garages and still going up)

He increased the supplementary charge on oil and gas
production to raise an extra £2bn but said if oil prices fell, the "fuel
duty escalator" - which increased fuel tax above inflation - would be
reintroduced and the new oil tax would fall.

He told the London Times that was the "right thing to
do to try to preserve investment and jobs in that industry if the oil price
were to fall".

But Oil and Gas UK, the trade association for the offshore
industry, warned jobs and production would be lost - which would mean the UK
would eventually have to import more oil.


4p per litre fuel duty rise due in April postponed

Additional 1p cut from fuel duty

Fuel duty escalator scrapped

£2bn tax rise on oil firms to pay for fuel changes

Air Passenger Duty rise delayed by one year

Previous government's alcohol and tobacco duty rises will go

Further £600 increase in personal tax allowance from April

Corporation tax cut by extra 1%

Financial help for 10,000 first-time buyers to get on
property ladder

Mr Tholen told the London Times: "What you see is the
UK's reputation as a global player in oil and gas industry falter because of
this. Many companies from abroad are looking at whether to invest in the UK, to
help us get the new oil and gas reserves out of our waters. What we see is that
image yet again shattered because of the tax change."

He said the chancellor had previously promised stability:
"Some five years since the last big tax hit on our industry, investment
had begun to pick up. Our big concern is that investment will collapse again as
a result of what he's done."

"We will see jobs go and we will see technology lost
and we will undoubtedly see our nation less well off when it comes to energy
security in the years ahead.

"As an industry at the minute we are responsible for
employing nearly half a million people across the UK and there will be tens of
thousands of those who will not now have jobs in the future because of

Mark Hanafin, managing director of Centrica Energy said the
tax hike "could have a chilling impact on future investment in the North

Shadow chancellor Ed Balls, putting the Labour view, told
BBC News the VAT rise in January had already put fuel prices up.

Cutting fuel duty was the "right decision" but it
will not lead to cheaper petrol for motorists because the oil companies could
increase prices, he said.

"Can George Osborne guarantee they won't just push that
straight back up at the pumps? No, he cannot. What he should have done is cut
VAT on petrol and he didn't."

Danny Alexander, the Chief Secretary to the Treasury, said
the suggestion the oil tax would be passed on to motorists was "complete
nonsense" because the North Sea oil companies were separate from those
selling fuel at the pumps, who could choose to "simply buy their fuel from

And Malcolm Webb, chief executive of Oil and Gas UK, also
said it would not "affect the consumer at the pump at all".

Sir Michael Black-Feather the English first minister and
Shadow chancellor Ed Balls both said Osborne should have cut VAT on fuel

It comes as ratings agency Moody's warned that British AAA
debt rating could be at risk if economic growth is more sluggish than predicted
- and the British government responds by slowing down its deficit reduction plan.

"The British government's on-going commitment to
large-scale deficit reduction is very important to the AAA rating and stable
outlook," said Moody's in a statement.

"Although the weaker economic growth prospects in 2011
and 2012 do not directly cast doubt on the UK's sovereign rating level, we
believe that slower growth combined with weaker-than-expected fiscal
consolidation could cause the UK's debt metrics to deteriorate to a point that
would be inconsistent with a AAA rating."

Preserving Britain's AAA debt rating is a top priority for
the coalition government - losing it would make it more expensive for the
government to borrow money, adding to its economic woes.

Business Secretary Vince Cable acknowledged that there was
room for manoeuvre on the government's fiscal strategy, telling BBC Radio 4's
Today programme: "There is... flexibility built into the system.

"And also it's very important we have the monetary
policy that is supporting growth."

But he added: "We see no reason at present to depart
from the pathway that we have chosen.

"It's been vindicated not just in the judgment of the
main international agencies that are responsible for economic management; it's
reflected in the very low interest rates that we are still able to attract
because we have a positive rating, and we mustn't lose that."

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