The biggest producer of oil and gas in the North Sea has reported that the government’s energy profits levy (EPL) has “all but wiped out our profit for the year”.
Harbour Energy said it had “reduced our UK investment and staffing levels” and bolstered its aim to expand elsewhere as a result of the hit from the windfall tax.
It has become something of a political football during the cost of living crisis to date, with opposition parties accusing the government of not going far enough in its efforts to recover costs of its energy bill support for households and businesses from extraction companies’ UK operations.
The likes of Shell and BP have revealed record profits on the back of elevated oil and gas prices due to the war in Ukraine, though their respective upstream activities expand far beyond the boundaries of the North Sea.
UK-focused Harbour had warned in January that it was to make head office workers in Aberdeen redundant in direct reaction to the hike in the levy, announced by chancellor Jeremy Hunt in November last year.
It took the EPL rate to 35% from 25% but the decision took the effective tax rate on North Sea profits to 75% because of the 40% corporation tax charge already applied.
However, some investment relief is granted under the levy.
Harbour’s chief executive said the job losses, yet to be completed, would be “significant” and it was looking to cut costs by $40m this year.
its profits after tax for 2022 came in at $8m (£6.7m) due to a “$1.5bn one off non-cash deferred tax charge associated with the EPL”, the company said.
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BP boss defends UK tax contribution
But shareholder distributions of $553m were made during the year and it proposed a $100m final dividend which marked a 9% increase in awards during the year.
A new share buyback plan worth $200m was also revealed.
Shares fell 2% at the open.
Chief executive Linda Z Cook said: “The UK Energy Profits Levy, which applies irrespective of actual or realised commodity prices, has disproportionately impacted the UK-focused independent oil and gas companies that are critical for domestic energy security.
“For Harbour, the UK’s largest oil and gas producer, it has all but wiped out our profit for the year.
“This has driven us to reduce our UK investment and staffing levels.
“Given the fiscal instability and outlook for investment in the country, it has also reinforced our strategic goal to grow and diversify internationally.”
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5:54
‘These are the windfalls of war’
Labour is among government critics urging that the EPL is more punitive given that households and businesses are suffering from record energy bills.
Mr Hunt is widely expected to maintain the energy price guarantee at its current level of £2,500 in his budget next week rather than cut the level of support from April as had been planned.
This is due to a fall in wholesale gas costs which has reduced the expected cost of the financial aid package.
Scientists are turning detective to work out what British dolphins are up to beneath the waves – by using forensic-style DNA techniques on their poo.
Conservationists have been studying the 250 or so bottlenose dolphins living in Cardigan Bay, west Wales, over many decades.
Up to now, they have only been able to observe the dolphins as they surface to breathe or play, identifying the animals from the unique marks on their dorsal fins to establish which animals were hanging out together and where.
Image: Dolphins in Cardigan Bay. Pic: Sarah Perry/WTSWW
But now for the first time scientists are using DNA excreted by the dolphins in their poo to build a more complete picture of their lives.
It allows them to identify the sex of individuals and how they are related to other animals. Signficantly, it also shows what the dolphins have been eating.
Image: Dolphin poo. Pic: Sarah Perry/WTSWW
Dr Sarah Perry, marine conservation manager at The Wildlife Trust of South and West Wales, said: “In order to be able to conserve them, we need to know why they’re here and a big a missing part of that is, what they’re feeding on.
“Is that changing at different times of the year? Are certain species of fish more important to them early on in the year, in the spring, and the summer months, and then does that change over the autumn and winter months?
“Are certain species important for younger animals? We don’t know that, so that kind of information, we need to find out.”
Image: Dr Sarah Perry
Catching dolphin poo involves a large element of luck.
The animals occasionally eject a cloud of waste material as they swim.
But it quickly sinks, so the scientists’ boat needs to be close enough for them to scoop it out of the sea with a fine-meshed net.
A sample is then sent to a lab at the University of Aberystwyth, where DNA is extracted for analysis.
Results so far suggest the dolphins are having to adapt to a change in fish species as the water warms.
Image: Dr Niall McKeown
Dr Niall McKeown, a marine biologist at the university, said: “We are seeing large amounts of sardine, sprat, and anchovy.
“This is quite interesting because these are species that are known to have increased in abundance in Welsh waters in recent years in response, we believe, to climate change.”
Image: Dr Niall analyses a sample
Scientists unsure why dolphin numbers are falling
But questions remain about the dolphins.
The number in Cardigan Bay seems to be falling, but scientists are not sure whether that’s a natural cycle or a response to other factors.
Boat noise and disturbance from some fishing activities, such as scallop dredging, could impact the animals, which rely on sound to communicate.
Dr Parry said: “How lucky are we to have such an important population of dolphins here? It’s crazy that we really don’t know that much about them.”
Sir Alan Bates has accused the government of presiding over a “quasi kangaroo court” for Post Office compensation.
Writing in The Sunday Times, the campaigner, who led a years-long effort for justice for sub-postmasters, revealed he had been given a “take it or leave it” offer that was less than half of his original claim.
“The sub-postmaster compensation schemes have been turned into quasi-kangaroo courts in which the Department for Business and Trade sits in judgement of the claims and alters the goal posts as and when it chooses,” he said.
“Claims are, and have been, knocked back on the basis that legally you would not be able to make them, or that the parameters of the scheme do not extend to certain items.”
More than 900 sub-postmasters were prosecuted between 1999 and 2015 after faulty Horizon accounting software made it look as if money was missing from their accounts.
Many are still waiting for compensation despite the previous government saying those who had their convictions quashed were eligible for £600,000 payouts.
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6:36
‘It still gives me nightmares’
After the Post Office terminated his contract over a false shortfall in 2003, Sir Alan began seeking out other sub-postmasters and eventually took the Post Office to court.
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A group litigation order (GLO) scheme was set up to achieve redress for 555 claimants who took the Post Office to the High Court between 2017 and 2019.
Sir Alan, who was portrayed by actor Toby Jones in ITV drama Mr Bates Vs The Post Office, has called for an independent body to be created to deliver compensation.
He added that promises the compensation schemes would be “non-legalistic” had turned out to be “worthless”.
It is understood around 80% of postmasters in Sir Alan’s group have accepted a full and final redress, or been paid most of their offer.
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‘Lives were destroyed’
A Department for Business and Trade spokesperson told Sky News: “We pay tribute to all the postmasters who’ve suffered from this scandal, including Sir Alan for his tireless campaign for justice, and we have quadrupled the total amount paid to postmasters since entering government.
“We recognise there will be an absence of evidence given the length of time which has passed, and we therefore aim to give the benefit of the doubt to postmasters as far as possible.
“Anyone unhappy with their offer can have their case reviewed by a panel of experts, which is independent of the government.”
Sir Keir Starmer could decide to lift the two-child benefit cap in the autumn budget, amid further pressure from Nigel Farage to appeal to traditional Labour voters.
The Reform leader will use a speech this week to commit his party to scrapping the two-child cap, as well as reinstating winter fuel payments in full.
There are now mounting suggestions an easing of the controversial benefit restriction may be unveiled when the chancellor delivers the budget later this year.
According to The Observer, Sir Keir told cabinet ministers he wanted to axe the measure – and asked the Treasury to look for ways to fund the move.
The Financial Times reported it may be done by restoring the benefit to all pensioners, with the cash needed being clawed back from the wealthy through the tax system.
The payment was taken from more than 10 million pensioners this winter after it became means-tested, and its unpopularity was a big factor in Labour’s battering at recent elections.
Before Wednesday’s PMQs, the prime minister and chancellor had insisted there would be no U-turn.
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Will winter fuel U-turn happen?
Many Labour MPs have called for the government to do more to help the poorest in society, amid mounting concern over the impact of wider benefit reforms.
Former prime minister Gordon Brown this week told Sky News the two-child cap was “pretty discriminatory” and could be scrapped by raising money through a tax on the gambling industry.
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Brown questioned over winter fuel U-turn
Mr Farage, who believes Reform UK can win the next election, will this week accuse Sir Keir of being “out of touch with working people”.
In a speech first reported by The Sunday Telegraph, he is expected to say: “It’s going to be these very same working people that will vote Reform at the next election and kick Labour out of government.”