And there was you thinking that no government could bind its successors. Now, in a widely-trailed move, Osborne has announced reliefs on oil- and gas-field decommissioning costs that will be delivered contractually.
"We will end the uncertainty over decommissioning tax relief that has hung over the industry for years by entering into a contractual approach"
This is because while future governments may change their minds, contracts are pretty inviolable. It was an approach that I first noticed when it was being advocated in respect of the various bungs the renewables industry wants from Huhne's "electricity market reforms": they don't want subsidies any more, they want contracts. (Anyone know of any other precedents ?) Ironic, of course, that it's Big Oil that now wants in on the same largesse.
Perhaps I'm wrong, but I find this highly suspect on philosophical grounds. It's not obscure why a company that has temporarily conned its way into a government's affections (but fears the government or its successors might one day wise up), should be keen to lock in the scam. But why would a government wish to pander to them thus ? I know how the argument runs: 'because if you don't, no-one will invest in what you want us to'. Well perhaps no-one should invest in something that depends on an obviously daft, faddish subsidy.
There will be no end to this. It's a trap for governments in common law jurisdictions, where the sanctity of contracts really means something - and that 'something' is precious, not to be abused by governments and their subsidy-lackeys. Of course, in civil code regimes they all chant pacta sunt servanda with the best of them; but they also know that in the fullness of time a court may re-interpret (or indeed re-write) a contract based on changes in circumstances. That just doesn't happen under common law, which ordinarily I would say is incredibly important.
I really don't like this turn of events. Anyone think I'm barking up the wrong tree ? (Or just barking, yeah yeah ...)