EXCLUSIVE report by Scottish-UK-Energy News
MPs in the House of Commons are to hold a debate calling for the UK chancellor to take ‘fiscal action’ – aka to reduce taxes – on North Sea oil and gas exploration and production.
The debate – to be held in Westminster Hall next Thursday (3 March) – also calls on Osborne to develop an ‘action plan’ to help the N. Sea oil and gas industry to recover from the effects of the collapse in crude oil prices.
The debate was approved by the Westminter parliament’s BBCttee (Backbench Business Committee) following a cross-party petition involving MPs from the three main parties – SNP, Tory and Labour.
Peter Aldous (Tory MP, Waveney, East Anglia) – one of the petitioners – told the BBCttee that it is vitally important to air these issues ahead of the British budget statement by Chancellor Osborne, which he is due to make on 16 March.
The shock findings from Oil and Gas UK earlier this week reveal an industry ‘teetering on the edge of chasm’ as exploration for new oil fields is choked off and with nearly half of all existing N. Sea fields pumping at a loss.
Consequently, industry guru Sir Ian Wood urged a 10% cut in N. Sea taxes – a call also put to David Cameron in this week’s Prime Ministers’ Question time in the parliament by the SNP’s UK energy spokesman, MP Callum McCaig.
Aldous also told the BBCttee that he wanted MPs to debate different levels of taxation – including, for instance, lower tax levels on gas production from the southern North Sea.
And he added: “We’d also like to encourage a much more collaborative approach from players in the industry, which has traditionally not had much of a collaborative culture.
“These days, we now have many more smaller operating companies than the ‘traditional’ Oil Giants in the heyday of the exploration gold rush last century, and it is important to encourage everyone to work collaboratively together.
The 2016 UK Oil and Gas Collaboration Conference – Aberdeen 14 April
Mary Glindon, (Lab, MP, North Tynside) said: “There have been 2,000 supply chain job losses in my area since Christmas and the oil and gas workers in my constituency certainly feel they are not getting their energy voice heard in the industry and in parliament.
“It’s having a profound effect in Tyneside and we need a wide ranging debate in parliament on the oil and gas industry.”
There has already been a debate on the N. Sea oil and gas industry in the Scottish parliament.
SNP MP Kirsty Blackman added: “The importance of fiscal issues to the future of the oil and gas industry – which is notorious for not working together in the past – cannot be overstated.
“The industry’s own activity report shows how serious the situation is and we need to take action now to prevent more job losses in the future.”
Aldous added: “The industry can have a 30-40 year future life extension – with the right fiscal policies and with decommissioning work on the horizon – but there is a pressing need for debate now, before the UK budget.”