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July 15th, 2012 
FAKE NEWS for the Zionist agenda Press TV has conducted an interview with Juan Carlos Boue, oil analyst at the Oxford Institute for Energy Studies, Oxford about a British government scandal that has been exposed where tens of billions of pounds instead of going to the British people has been siphoned by British oil companies in under-taxing with complicity from successive British governments. The following is an approximate transcription of the interview.
Press TV: Tell us what you mean by that – what could we have done with the oil companies that we didn’t do that would have left us with billions of pounds up on the deal?
Boue: When you compare the actual amount of taxes that the companies paid for oil and gas production activities in Great Britain and you compare them with what they paid in very similar sort of situations in places like in particular Norway, but also in places like Denmark and the Netherlands, you come to the conclusion that the effective rate of taxation in the UK was very low particularly from the 1990s onwards.
The windfall that got away has got bigger and bigger with the passage of time as oil prices have shot up. So, for example if you compare the relative levels of taxation in 2008, which was when oil prices reached their top level ever of around 150 dollars per barrel, in that year – which if you go to HMRCs website it tells you that a record amount of 12 billion pounds was levied in oil taxes – that 12 billion pounds amounts to more or less 12 cents on every dollar of revenue generated by the sector.
In Norway in that same year the government collected around 70 cents for every dollar. So, in dollar terms, collection in the UK was 21 dollars per barrel, in Norway it was 27 dollars per barrel more – not 27 dollars per barrel, but 27 dollars per barrel more. That’s a lot of money.
Press TV: That’s absolutely staggering figures, it’s a major scandal.
Boue: It’s probably about 15 billion pounds.
Press TV: An extra 15 billion pounds in 2008 alone?
Boue: Well, you needn’t say the totality of that 15 billion pounds could have been levied here (in the UK), but conservatively you could say 5 billion pounds – 5 billion pounds would be a conservative estimate of extra taxes that could have been levied that year alone.
And the same is true of previous years because the differences in the rates of effective taxation between Norway and Britain and other North Sea countries are very large.
So for instance, in 2008 Denmark, which has a much smaller production and a much smaller hydro-carbon endowment and consequently higher costs, their effective taxation rate was roughly about 20 percent higher than Britain’s. So again…
Press TV: Extraordinary. And this has been a historic problem if you like of under-taxation right from the start of North Sea production in the mid 1970s or is there a big spike, as I understood you to say, in the 1990s under Mr. Blair as well as under Mr. Major?
Boue: It starts manifesting itself after the oil price crash of 1986 and accelerates greatly with the Major government and then continues under two Labor administrations. In fact from 1993 onward all new fields discovered in the North Sea would attract the same level of taxation – statutory taxation – you only needed to pay corporation income tax, you would have paid no special petroleum taxes.
And unfortunately the oil and gas business is not the same as the pizza business or what have you.
Press TV: Well it’s a good deal more profitable because in that period not least because of the beneficence of the British government, these oil companies made record profits didn’t they?
Boue: Record profits with every passing year and as the oil prices have continued to rise their record profits rise accordingly as well.
Press TV: Now, these companies are paying this tax whether happily or not, but continuing to pay it because they are continuing to extract in a smaller much weaker country like Norway than they are in Britain?
I was in parliament throughout that period; I wish I had met you then. I wonder why this wasn’t a major scandal in British politics at that time.
Boue: I don’t know either and perhaps you would be able to say that actually when you say that it is a smaller and weaker country, perhaps that’s not the case at all and that the weaker government is this one (UK).
Press TV: Good Point – I meant numerically in terms on size of population and so on. Now tell me this… I’m Scottish; there’s pressure for an independent Scotland; most of the oil reserves would lay off the Scottish mainland assuming they were able to take Orkney and Shetland with them in their independence, which Is not a given…
Is there any reason to believe that an independent Scottish State would tax the oil companies anything like Norway for example – and it would be a comparable size of population to Norway?
Boue: Not really because when you look at the reaction north of the border by the SMP every time that even a modest increase in taxation has happened they have been among the first to decry this and the latest increase in the corporation tax special charge, which was enacted by Mr. Osborne so that he could pay for not increasing the price at the petrol pump, drew furious criticism from the SMP and the first minister and so on.
And I’ve heard on the grapevine that the oil companies do not necessarily look unfavorably at the prospect of Scottish independence because they consider that their taxes would certainly not be higher and would probably be lower.
Press TV: Now, is it too late for the British state? Has that horse bolted? Could meaningfully I or other parliamentarians begin to mount some pressure to look again at these tax rates?
Boue: Well, in terms of production unfortunately the Windfall has got a way because UK North Sea production is now significantly passed its peak, but the time to have taken decisive action would have been in the middle of the 90’s or so.
Nevertheless, that does not mean that there are no very, very significant rents that could still be collected and that in theory should accrue to the British Crown, therefore to the British people.
So in that sense because the price of oil is so high now and it does not really give any evidence of coming down significantly any time soon, certainly not to the levels where it was in the mid 1990’s or in the 1990’s, you could still make a tidy sum out of enacting really minimal adjustments.
Let us not speak about taking taxation here to a par with Norway, but if you look for instance at the case of Denmark, I suspect that you probably do not know that in 2003 the Danish government enacted a reform what is called its sole concessionaire whereby it took 20 percent of the oil concession without any payment at 20 percent and a 20 percent profit share.
That actually became effective I believe three days ago when the original concession expired. Obviously that was not something that was very much talked about in polite circles because that is a very bad example that our fellow Danes give us of what you can actually do if you have the political will.
Press TV: Have you got a compound figure on what, say from 1990 till now, the British tax payer has lost out on if for example we had been as tough on taxes as Norway?
Boue: Well you can estimate it in various ways and it essentially depends on what effective tax rate you think would have been applicable and rather than give you a concrete figure it is fair to say that it would have run into tens of billions of Pounds.
Press TV: And if it had reached 70 billion Pounds then it would have wiped out much of the deficit?
Boue: Well when I said tens of billions of Pounds I was talking merely in nominal terms and if you take into account the time value of money considering that we are talking about starting in the early 1990’s I would not be surprised if it would have reached such a figure. I would not be surprised at all.
Press TV: Just in thirty seconds, are we the only country in the world that discovered and ended up poorer when it run out than we had been when we found it?
Boue: Unfortunately not, but considering that most of the governments that manage to do that lacked the structure and institutions of a British State, so we are unfortunately in a class of our own as far as that is concerned.
Press TV: As far as that and much else.
SC/AHK/JR
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