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Robert Halfon, Harlow Prospective MP, and Alan Pond, President of Harlow’s Conservative Association, argue that Brown’s handling of the oil industry should rank amongst his more high profile failures.

As
Prime Minister can Mr Brown claim complete satisfaction with his past
decision making? Will he be capable of accommodating decisions
affecting both domestic and international affairs, reconciling current
black holes with long-term planning?

Consider the oil industry’s
presence in the North Sea. It is truly an international business where
long-term decisions are made daily. Forty years ago, the Oil Majors
commenced a programme of crude oil exploration and production in the
very hostile conditions of the North Sea. £300 billion has since been
invested providing £200 billion of tax revenue to the Treasury.

More
recently, £8 billion was the annual investment in 2004 by the oil
industry and this was expected to increase in 2005 to £10 billion due
to Treasury requests to increase production during a temporary
international shortage. The latter blip forced up product prices and
short-term oil industry profits.

Facing a financial budget black
hole, Mr Brown chose to impose an extra North Sea crude oil and gas tax
of £2.3 billion per annum contrary to internal Treasury, oil company
and banking advice. With North Sea exploration and production now
unviable, investment has drifted down and is now forecast to have
declined to £4 billion in 2007 and production of oil and gas by 12%.

Three
years ago the Government’s own forecast stated that provided annual
investment was maintained, 85% of the UK’s energy needs will be
maintained from the North Sea to 2020. This will now be reduced to 45%.
This is at a time when we face an re-emergent authoritarian Russia
which currently controls 25 percent of Europe’s gas supplies.

Will
user nation governments never learn? The international recessional
problems of the 1970/80s were caused by user nations taking more in
taxation from a barrel of crude oil than they gave to the Middle East
producers. Now, they are even doing it to themselves! There are now 25
billion barrels of oil left in the North Sea that may never be
recovered.

For the past few weeks, the Labour Party have attempted to
perpetrate ‘a year zero’ on the British people. An attempt has been
made to sleep walk the public into believing the last ten years never
ocurred – that a new era has begun.  But Mr Brown’s plan for ‘year
zero’ will not succeed in the long run. The Government cannot succeed
in the face of its own internal contradictions-failing public services,
widespread cynicism from the public about politics and significant
economic clouds ahead (particularly the huge level of personal debt).

Only
a few weeks ago, the Prime Minister was exposed for having ignored
advice about taxing pensions funds. In the heady days of the new
Premiership, this  has all but been forgotten. As Conservatives, it
must be our job to remind the electorate of important truths.

Our Pensions, our gold reserves and our oil revenues have been
frittered away by Gordon Brown. To paraphrase John Reid, is the new
Prime Minister really fit for purpose?

17 comments for: Robert Halfon and Alan Pond: Brown’s oil leak

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