CHRIS Huhne, the energy secretary, was kept in the dark over the chancellor’s plans to launch a £10bn tax raid on North Sea oil and gas firms in his Budget, City A.M. has learned.
Huhne is said to have reacted with surprise on learning of the policy, which saw the special extra tax for oil and gas producers in the UK hiked from 20 to 32 per cent overnight.
George Osborne’s decision to keep Huhne out of the loop underlines the fraught relationship between the pair, who had a bruising row over the AV vote at a cabinet meeting this week.
Yesterday, Huhne defended the policy in front of the energy select committee but refused to say whether he had been kept informed: “We do not comment on consultations and discussions between departments before a Budget.”
An aide to Osborne insisted that tax policy was a matter for the chancellor, adding the Treasury “makes no secret of the fact it guards its supremacy over tax changes quite sensitively”.
However, some cabinet ministers were consulted over certain changes to taxation contained in the Budget. A Treasury source said there was no need to inform Huhne, because the chancellor was convinced the policy would have little impact on investment in energy.
Oil & Gas UK CEO Malcolm Webb said the policy would have been better designed had Huhne’s department of energy and climate change been involved.