US President Donald Trump has slammed the UK for its high taxes on North Sea oil, which he described as a “TREASURE CHEST” for the UK.
In an early morning post on Truth Social, Trump said the UK could cash in its oil reserves near Scotland, where Trump opened a new 18-hole course at the Trump Turnberry estate in Aberdeenshire.
The US president said: “North Sea Oil is a TREASURE CHEST for the United Kingdom. The taxes are so high, however, that it makes no sense. They have essentially told drillers and oil companies that, “we don’t want you.” Incentivize the drillers, FAST. A VAST FORTUNE TO BE MADE for the UK, and far lower energy costs for the people!”
Chancellor Rachel Reeves has led a further tax increase on oil giants by increasing the windfall levy on oil and gas companies at last year’s Autumn Budget while extending it to 2029.
The UK now has an energy profits levy at a rate of 38 per cen while companies in the North Sea also pay ring fenced corporation tax, a supplementary charge and petroleum revenue tax.
The ring fence prevents taxable profits from North Sea oil and gas being reduced by losses in other activities by companies.
These combined levies have made the headline rate of tax on North Sea oil and gas activities 78 per cent, with several companies warning these costs were taking a toll on jobs and investment.
Taxes on oil and gas revenues are expected to yield some £5.2bn in the next year.
Trump pressures Labour on energy
The government has consulted businesses on how it could tax revenue, with reforms on taxation likely to be introduced by the Autumn Budget.
But Donald Trump’s latest tirade against high taxation levels in the UK could rattle Labour officials, including Reeves who could have to raise taxes by as much as £30bn later this year.
The government recently opened the door to further oil drilling in the North Sea as a law could be changed to undo a legal decision in Scotland that blocked Shell and Equinor from respectively exploring a gas project in Jackdaw and an oil project in Rosebank.
Shell believe the Jackdaw field could supply 1.4m homes in the UK while Equinor has said the Rosebank plant would add £25bn to the UK economy,
UK Sustainable Investment and Finance Association chief executive James Alexander argued the expansion of drilling would have “no impact on energy bills” and undermine the UK’s green credentials with investors as he criticised Trump for his impromptu comments.
“The idea that North Sea oil is an untapped ‘treasure’ is just another false myth told about our heavily depleted reserves,” he said.