Letter to the Chancellor on Rosebank Tax Projection

I have written to the Chancellor John Healey to express my concern after projected tax revenues for the not-yet-approved Rosebank oil field were included in the Budget. Given the timing of the Budget in relation to the Secretary of State for DESNZ’s pending decision about Rosebank, the inclusion of the projections on this occasion risks suggesting that the Government might be approaching the decision with a pre-determined view which would render any approval unlawful. I have asked him to provide assurance that this is not the case.

The full text of the letter is as follows:

Rt Hon John Healey MP

Chancellor of the Exchequer

CC: Rt Hon Miatta Fahnbulleh MP

Secretary of State for Energy Security and Net Zero

Dear John,

Re: Rosebank tax projections included in Budget calculations

I am writing to express concern that last week’s Budget and the Treasury’s economic

calculations assume that drilling at Rosebank oilfield will be approved and will generate

significant tax revenues. To quote from the relevant OBR document (here), which provides

further detail:

“These forecasts are based on the North Sea Transition Authority’s (NSTA) projection for total

oil and gross gas production…..The projection includes production from currently producing

fields (including Jackdaw), and the NSTA’s estimate of production from development of new

fields, which includes Rosebank, and from future discoveries.”

This is concerning on a number of grounds.

Whilst it’s become common to draw on industry estimates of oil and gas production in

economic forecasts, given the timing of the Budget in relation to the Secretary of State for

DESNZ’s pending decision about Rosebank, the inclusion of the projections on this occasion

risks suggesting that the Government might be approaching the decision with a pre-determined

view. You will know that this would render any approval unlawful.

These financial assumptions could also potentially put direct or indirect pressure on the

Secretary of State to reach a decision that’s aligned with the expectations in the Government’s

budget, even if these are contrary to the UK’s climate obligations. Given officials at DESNZ

indicated only a matter of days ago that the Secretary of State was not minded to give the go

ahead to Rosebank (see here), the Treasury should surely be avoiding any implication that it’s

seeking to influence the decision-making process in a different direction.

This is turn raises questions about who is making the Rosebank decision. Given the quasi-

judicial nature of the regulatory process for the Rosebank project, please can you assure me

that the Treasury is not involved in any shape or form and is acting in accordance with the

propriety rules.

I am also concerned by the implication that your Government’s economic plans are prioritising

the short-term revenue gains from drilling at Rosebank – and indeed Jackdaw

– over the severe medium- and longer-term economic damage associated with climate breakdown

and burning new oil and gas. Both Parliament and the public deserve to know that any decision

about Rosebank is being taken free from Treasury influence, in accordance with the rules, and

mindful of its devastating climate impacts – I’d therefore be very grateful for your response to the concerns

I have raised.

Yours sincerely,

Carla Denyer MP

Member of Parliament for Bristol Central