I noted recently the UK's inadequate tax response to energy issues, having frittered the revenues of North Sea oil away, and now planning to forsake much of the revenue from 'fracking' before it even hits the Treasury's coffers.
In that context I was pleased to note the Guardian reporting that:
European Greens consider challenge to UK tax breaks for shale gas drilling
The context is that the Greens think the UK government is undermining necessary progress towards renewables and that is that context low tax rates for racking constitute unjustified state aid.
These arguments are complex. I cannot judge whether there is a good case or not: I simply have not given it the time to do so. but I am pleased to see that the issue is being raised. It is wholly appropriate that it is.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
As you probably know, I have done a lot of research on state aid law, policy, and politics. The idea here is certainly not ludicrous on its face. Tax breaks for fracking certainly constitute state aid (there’s a benefit, it comes from state resources, and it’s specific), though the European Commission could rule that it is consistent with competition in the EU market.
In the course of researching my 2000 book *Competing for Capital*, one of my interviewees (a Canadian who had served on NAFTA dispute panels) said that s/he could conceive of a time when regulatory concessions could be seen as subsidies by the WTO. This is a much more concrete subsidy, so I will certainly be interested to see what the Commission does with this case. It should not even require a complaint; the UK government will have to notify it to the Commission unless it qualifies for a Block Exemption, which I doubt would be the case here.
Thanks!