UK 'has squandered oil revenues'

The UK's North Sea oil and gas reserves are much reducedThe government has been accused of "squandering" the windfalls of the country's now dwindling North Sea oil and gas reserves.
Income from these sources should have been better invested in renewable energy, says a report by the New Economics Foundation and the WWF.

It also claims that £1 in every £12 of government income comes from oil or gas, making it "hooked" on the fuels.

The Treasury said it increased the tax on North Sea oil firms in 2005.
'Urgent transition'

The New Economics Foundation (NEF) and Worldwide Fund for Nature (WWF) report alleges that, as the government gets so much money from fossil fuels, it has a powerful short-term disincentive to "kick the fossil fuel habit".

The UK needs to admit its addiction to oil, and make a tough decision to get clean
WWF's oil policy officer James Leaton
"Britain has squandered its windfall of natural resources from North Sea oil and gas," said NEF policy director Andrew Simms, the report's lead author.

He called on the government to quickly introduce a new windfall tax to help the UK pay for its "urgent transition to a sustainable, decentralised energy system".

The government's revenues from oil and gas
"The UK needs to admit its addiction to oil, and make a tough decision to get clean," added report co-author James Leaton, of WWF.

Environmental commitment
A Treasury spokesman said the government increased the rate of the supplementary charge on North Sea oil companies in the 2005 Pre-Budget Report.

"The government is committed to ensuring that policies reflect its wider environmental, economic and social objectives," he said.

He added the government already funds several schemes to incentivise sustainable energy production and use.

Such projects include the Renewables Obligation, which requires all electricity suppliers to source a growing percentage each year of their total sales from renewable sources.