Conclusions and recommendations
1. We
conclude that it is impossible to isolate with certainty the impact
of tax increases from that of other factors such as price or initiatives
designed to stimulate investment or increase recovery, including
the PILOT programme or the brown field initiatives. (Paragraph
17)
2. In our view, the
fiscal regime is unlikely to be the most important factor driving
investment decisions in major fields. Although tax is clearly
significant, the nature of the oil and gas fields, the underlying
geology and future oil and gas prices are more likely to be the
dominant drivers, but the fiscal regime may be a factor affecting
investment in older, more marginal fields. (Paragraph 17)
3. There is a need
to balance the return on investment and the return to the UK taxpayer
for the use of its natural resource. (Paragraph 18)
4. We conclude that
a simple fiscal regime that is consistent and predictable would
be of most benefit to the industry and the UK in the long term.
(Paragraph 22)
5. We are heartened
by the positive moves by the Treasury to consult on the North
Sea fiscal regime and by the engagement of industry with that
consultation. (Paragraph 25)
6. Within the industry,
there is clearly a perception of instability and if there are
to be further changes to the fiscal regime they should seek to
improve stability and predictability, without harming the UK's
already competitive position or depriving the UK Government of
a fair share in the economic rent from the exploitation of its
natural resources. Changes to the fiscal regime should aim to
make the system simpler to administer both for companies and HM
Revenue and Customs (Paragraph 28)
7. We urge the Government
and the industry to engage constructively in the current dialogue
and to build on that dialogue going forward once the current consultation
comes to an end (Paragraph 29)
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