We hear today that the Morecambe Bay gas field is being closed for four weeks for maintenance. The field accounts for 6% of UK gas production. We also learn that Morecambe South, part of the the field, is now taxed at 81% and may not re-open, owing to the high taxation.
It is further proof that imposing higher tax rates may lead to less revenue than the Treasury expects. We need the gas. We have just lived through a couple of very cold winters, and even this spring face cold easterly winds which can bring frosts as late as May. If the government is serious about its wish to switch more of our economic activity into manufacturing, the UK wil need energy to fuel the factories and fire the furnaces.
The combination of the carbon tax and the higher oil and gas taxes represent an obstacle to more manufacturing which the government should review. If part of Morecambe fails to re-open, we will simply import more gas from elsewhere, adding to the pressures on world supplies of hydrocarbon.