The Guardian reports this morning:
The dispute between energy firms and the government over the level of tax paid for offshore UK drilling dramatically escalated on Sunday with British Gas threatening to shut down an important gas field on the Irish Sea.
Centrica, which owns British Gas, closed the Morecambe Bay field for routine maintenance and warned it may not reopen it because of the 12% tax rise on offshore drilling profits that was announced by the chancellor, George Osborne, in the budget in March.
Now I'm not saying Osborne / Alexander got their decision on extra energy taxes right - r managed them well - but I am saying this is posturing by Centrica. It's a variation on the 'if you tax us we'll go away' theme. As the Guardian also reports:
In February, Centrica reported record profits of £742m at British Gas — a 24% leap on a year earlier — provoking criticism from consumer groups. Centrica had pushed through a 7% increase in energy bills just two months earlier.
And there is, of course, a simple solution. If they refuse to extract the gas then we should nationalise their assets and do it instead. That was what British Gas was created to do. The mistake was Thatcher's. She thought the private sector was efficient. That's not true. But they're definitely a bunch of charlatans when it comes to making threats about not paying tax - and it's time to call their bluff.
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Oddly enough, Thatcher’s basic instinct in the early 1980s was to keep British Gas in the public sector precisely because of these kind of potential problems. It was her extreme right wing industry secretary, Nicholas Ridley, who persuaded here that it was safe to privatise BG. The man was a very nasty piece of work – down there with Keith Joseph in the pantheon of nasty neoliberals. When unemployment went over 2 million in the early 1980s he said, “the high level of unemployment is evidence of the progress we are making”. One can imagine ConDem ministers saying the same thing over the next few years.