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UK Risks Dependence on Imports as Oil Giant Warns of Starvation and Loss of Control – Jim Newell

Brexiteers like to argue that leaving the EU has allowed citizens to ‘take back control’ of law making from what is an undemocratic organisation and is therefore empowering. The following example from the news illustrates why the reverse is the case.

A major oil and gas producer, Ithaca, has said that the UK risks being starved of energy from the North Sea and left reliant on imports. Ithaca says that current taxation policy and proposals announced by Labour are deterring investors. Ithaca owns significant stakes in two huge proposed new oil fields, Cambo and Rosebank, in the North Sea. The company says that a combination of punitive and changing windfall taxes and a promise by Labour to ban new exploration licences is deterring investment and risks making the UK more reliant on imported energy. Ithaca’s executive chairman, Gilad Myerson, said: “The taxation regime is changing constantly. Also, the politicians keep on making statements which spook investors, imagining they will be able to stop licences and stop oil development in the UK. Ultimately what that means is that they will be starving the UK for energy”.

What we have here is a perfect example of why ‘take back control’ was always a myth. In the globalised world of the early twenty-first century, individual national governments have in many significant areas of policy – and they hardly come more significant than the area of energy – lost control over policy making to large corporations. These corporations can, in effect, dictate policy to national governments by threatening to invest elsewhere, playing one state off against another, unless governments do their bidding. Here is Mr Myerson again: “At the moment, the UK is not a jurisdiction that attracts investment. Most money is actually going elsewhere … When it comes to a project like Cambo and Rosebank, they need to make sure that the environment is stable because this is a project that will last for ten years. Without that stable regime, investors won’t want to invest, banks won’t want to provide credit and the industry won’t be able to commit to large-scale projects”.

In other words, you can have as many elections as you like, but once a government has agreed to a corporation’s terms, long-term investment projects mean that any subsequent government’s hands are, in effect, tied. So much for taking back control!

The case illustrates why, if we really want to ‘take back control’, we need to go back into the EU and why we need more EU integration, not less. The point is really simple: because in the early twenty-first century national governments are so weak and large corporations are so strong, it is only by states pooling their sovereignty in large supranational entities like the EU, that they can recover for their citizens the power to stand up to the corporations and not be dictated to by them.

So what we need are further transfers of sovereignty to the EU, together with democratising reform of the EU itself to ensure that more powerful EU institutions are more fully and effectively accountable to European citizens collectively. In that way we can ensure that ordinary citizens take back real control over their lives rather than the fake control promised by the Brexiteers.

As a final illustration of the way in which national governments and parties run scared of the large corporations, Labour has said that it will honour licences granted by the current government which environmental groups say will make it impossible to hit environmental targets. So again, if we want real change, if we want really to take back control of the policies will affect us and our children for generations to come, we have to recognise the following. We have to recognise that the nation-state has outlived its usefulness – that it is only through international collaboration and solidarity; through re-joining the EU; through a more integrated and democratically reformed EU, that we, as ordinary citizens, have a chance of constructing for ourselves a future that is worth having.

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