The consultation response highlights the fact that, while half of the UK’s gas needs are met by fields operating in the North Sea, the licence holders of those fields are owned by multinational, private equity and state-backed firms. Reliance on these fields does not produce energy security, nor does it protect consumers from volatile commodity pricing.

The response goes on to describe the opportunities that could instead be created by investment in emerging technologies, highlighting green and blue hydrogen production as an example.

It then describes some of the barriers that currently exist to decarbonising the UK’s energy production, including a lack of skills, training opportunities, long-term planning, and investment at a national level.

The response sets out the support that could be provided through the fiscal regime for decarbonisation of the energy sector. These include:

• reform to the R&D tax regime, to focus higher relief opportunities on the renewables sector; and
• expansion of the capital allowances regime to allow relief for the design and planning of renewable energy installations.

Finally, the response highlights simplification that could be achieved through reform of the various oil and gas tax regimes, including:

• repealing petroleum revenue tax; and
• merging ring-fence corporation tax and the supplementary charge.

The report recommends keeping the energy profits levy on the statute book and setting it at an appropriate rate (including 0%) as a response to energy price shocks at any given time in the future.