Autumn Statement: Greens angry as Osborne ‘panders to fossil fuel industries’

“The Chancellor once again put powerful interests and big polluters ahead of our health and well-being”

Green campaigners have rounded on George Osborne accusing him of pandering to the fossil fuel industry “at the expense of the environment” – on the day experts forecast that 2014 is set to be the warmest year ever and that humans were to blame.

The Chancellor announced a series of measures in his Autumn Statement designed to boost the North Sea oil and gas sector in the face of flagging prices, and to kickstart the UK’s fledgling fracking industry. Mr Osborne cut the “supplementary” tax charge the oil giants must pay on their North Sea profits from 32 to 30 per cent, and said he would introduce new “field allowances” as an incentive for companies to operate in technically demanding areas.

“The Chancellor once again put powerful interests and big polluters ahead of our health and well-being,” said David Powell of Friends of the Earth. “Mr Osborne has cut tax for dirty gas and oil, despite overwhelming scientific evidence of the need to end our fossil fuel dependency.”

Mr Osborne also tried to boost the prospects of the shale oil and gas industry – which has yet to prove it is commercially viable – by extending a system of deferred tax relief to operators from six to 10 years. This effectively allows fracking companies to recoup early losses by claiming tax relief once they become profitable.

Furthermore, he sought to win over sceptical members of public by promising a “sovereign wealth fund” of the type Norway uses for its oil profits. This will set aside some of the shale gas revenues for use by future generations.

The Chancellor’s environmental announcements were limited, and came off second best to the benefits being offered to oil and gas companies, campaigners said.

They included a promise to consider backing a tidal lagoon power project off the coast of Swansea and a £2.3bn initiative to boost flood defences – both of which have been previously announced, as has the £15bn road-building programme Mr Osborne unveiled.

The Autumn Statement comes as new research shows 2014 is set to be the hottest on record both globally and for Britain, with climate scientists pointing to fossil fuel emissions as the most likely cause, according to the World Meteorological Organisation and the UK’s Met Office.

Ed Davey, the Liberal Democrat Energy and Climate Change Secretary, said: “More record warm temperatures … are yet more evidence that we need to act urgently.”

Malcolm Webb, chief executive of the Oil & Gas UK industry body, welcomed Mr Osborne’s announcements, but said they did not go far enough: “We take the Chancellor’s announcement of a reduction in the industry’s tax rate as an important first step to improve the fiscal competitiveness of the UK North Sea. However, these can only be seen as first steps towards improving the overall fiscal competitiveness.”

Beccy Speight, Woodland Trust chief executive, said: “Was it too much to hope for that the Chancellor would show he is smart enough to understand that the natural environment, especially woods and trees, can help to deliver truly sustainable solutions on so many agendas?

“Sadly, mention of the natural environment was completely absent from the Chancellor’s statement. The opportunities to adopt common-sense solutions such as a longer HS2 tunnel through the Chilterns, to protect a significant area of ancient woodland, and the introduction of smart incentives for businesses to unlock resources to boost woodland cover, were missed,” she added.