George Osborne accused of giving tax breaks to Tories’ oil industry donors
Labour Jon Ashworth calls for explanation over why Tories’ ‘big-money backers’ benefit from autumn statement
George Osborne has been accused of using his autumn statement to give tax breaks to Tory supporters as it emerged that several companies run by Conservative donors stand to benefit from a more generous tax regime on the profits of the oil industry.
On Wednesday the chancellor announced that the charge on oil firms’ profits would be reduced from 32% to 30%, as well as other measures to help investment in the industry. The moves, which follow intensive lobbying by the oil sector and were welcomed by company executives, will cost the Treasury £470m over the next parliament.
In total, the Conservative party has received more than £2.5m since 2010 from donors associated with the oil industry. These include Amjad Bseisu, chief executive of EnQuest Oil; Alexander Temerko, director of Offshore Group Newcastle; and Ian Taylor, chief executive of Vitol, all of whom dined with senior ministers as part of the exclusive Conservative party Leaders Group in the summer. Such gatherings allow donors who give at least £50,000 to the party to socialise with senior ministers, including David Cameron, Osborne and others.
While there is no suggestion that rules on donations have been broken, Labour’s shadow cabinet office minister Jon Ashworth called on ministers to explain “why the Tories’ big-money backers have been benefiting from policy changes”.
He added: “We know the Tories’ election campaign depends on funding from a privileged few. Now we see many have a direct line to the Treasury.”
Last week’s changes were welcomed by Oil and Gas UK, the main representative body for the UK offshore oil and gas industry, as an “important first step” to help offshore exploration.
Bseisu donated £42,000 to the Tories in October 2013, a few weeks before being granted a licence to drill in the North Sea. He made a further donation of £15,000 on 27 May this year and £24,065 on 21 July, the month he welcomed Treasury moves to review the North Sea tax regime, calling it a “seminal moment for the industry”.
The government says the decision to change the rules has been driven by a desire to boost the industry and create jobs and is unrelated to donations to Tory coffers. Osborne has faced accusations from Labour that he used the autumn statement as an exercise to boost his party’s election chances while doing little to help the less well-off.
An Opinium poll for the Observer shows high levels of public scepticism about some of the chancellor’s pledges, including a promise to give £2bn more a year to the NHS and spend £15bn on improving roads. Forty-eight per cent said they believed the promise of more funds for the NHS was deliverable against 41% who thought it was not, while 47% of respondents believed the money on roads was deliverable against 40% who thought it was not.