Lack of additional support for oil industry "inexcusable"
The Government has been accused of treating the North Sea oil industry as a “cash cow”, with the Chancellor attacked over the “inexcusable” lack of extra support for the struggling sector.
The Government has been accused of treating the North Sea oil industry as a “cash cow”, with the Chancellor attacked over the “inexcusable” lack of extra support for the struggling sector.
SNP politicians and union leaders condemned Philip Hammond after he used his Autumn Statement to “recommit” to the current tax regime for the industry.
The Tory said the move was needed to provide a “stable tax regime”, and it was welcomed by the trade body Oil and Gas UK.
Chief executive Deirdre Michie: said: “We are pleased to hear the Chancellor recommit to HM Treasury's Driving Investment plan today. This sends a strong signal to investors that the Government recognises that the UK oil and gas tax regime needs to be predictable and internationally competitive.”
But Callum McCaig, the SNP's energy spokesman at Westminster, said: “There has been no new support for the oil and gas sector in this Autumn Statement. The Tories have been using the North Sea - and the north-east of Scotland's economy - as a cash cow for decades and we are getting precious little in return.
“Billions of pounds have flowed out of the north-east over the years, and today's statement proves the Tories aren't serious about giving anything back.”
The Aberdeen South MP accused the Government of failing to meet pledges made in its March Budget, saying: “Philip Hammond has failed to move on loan guarantees, failed to encourage exploration, and a failed to deal with decommissioning - risking the future of the industry and the many jobs it provides.
“Nine months on from the announcement at the March 2016 Budget, there is now a pressing need for the UK Government to work directly with the industry to agree and deliver loan guarantees for critical offshore infrastructure.
“We all know that without greater investment and activity, we risk losing vital capacity and skills in the supply chain that will support production and ensure we realise the total value from maximising economic recovery from the North Sea.”
Grahame Smith, Scottish Trades Union Congress (STUC) general-secretary, was also critical, saying: “It is perplexing that the Chancellor ignored the ongoing crisis in the North Sea.
“The STUC was sceptical over the benefits of further tax reductions but the Chancellor could have established a North Sea Public Investment Fund to safeguard key infrastructure and support the exploration activity vital to the industry's future. To say nothing at all is simply inexcusable.”
While UK oil and gas revenues have fallen in recent years, the Treasury forecasts these will rise to £1.8 billion a year in 2019-20, before then dropping back in the two years after that.
Ms Michie added: “Today's Treasury forecasts show our industry will be contributing £10 billion more in production taxes over the next five years than was previously expected.
“While this can be attributed in part to changes in commodity prices and exchange rates, it also reflects the significant work of industry to make our operations more efficient and to increase production.
“Our industry can make a vital contribution in delivering the Chancellor's ambitions for the economy and the Government's industrial strategy.”
But she added the sector is “still in urgent need of fresh investment and we need Government to keep working with us to ensure a competitive business environment”.