Its easy to be negative about the situation, given what has happened in the last few months. But the reality is that a lot of this is political rhetoric.
If you read between the lines, the constant turn of phrase used by Labour is that they are going to charge a "proper" windfall tax. Most people take that to understand that big bad oil and gas giants will get hit with punitive taxes, and somehow that will bring electricity bills down. The average man on the street certainly doesn't understand tax allowances and capital development allowances. That's just some term that accountants use. In fact, I doubt whether most people know there IS a windfall tax already.
All of this doesn't matter in the the heat of political battle. All politicians want is the majority of votes, and this anti fossil fuel narrative currently has a following.
However, note that Labour haven't once mentioned tax allowances since electioneering started 2 weeks ago. I believe this is for 2 reasons: 1) keep the narrative simple and 2) keeping the door open to NOT removing these allowances because they must know that it will kill the golden goose dead in its tracks. Stifel, the analyst, the other day said that there was only 100 days left to clarify the fiscal landscape before irreparable damage is done to the North Sea. This cannot have gone unnoticed.
I am waiting for the manifesto to see how much detail they will give. But in opening up the "numbers", they also give those opposed to the removal of tax allowances, something to get their teeth stuck into. Once you get into the nuts and bolts of the EPL, its pretty complicated and the more rope you give out the more chance there is of hanging yourself.
The political and economically expedient thing to do would be to raise the EPL to 78% till 2029 but retain the allowances. That way Labour get to keep their promise, and their voters will be happy, but the E&P will have some certainty, that will allow them to develop and pay tax revenues that "apparently" will pay for GB Energy...although no one knows what on earth its supposed to do!!
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