The Scottish National Party will today (3 March) use a Westminster Hall debate to renew its calls on Chancellor George Osborne to deliver fiscal support for the North Sea oil and gas industry in his British Budget on 16 March in order to secure the industry’s recovery.
Despite repeated calls from the SNP, the Chancellor failed to deliver new fiscal support for the industry in his Autumn Statement and has remained unwilling to make any commitment since then despite continued pressure from SNP MPs, the Scottish Government, Oil and Gas UK, Trade Unions, and other industry experts.
Securing support for the future of the industry is one of the SNP’s priorities for the Budget. The SNP are calling on the UK government to take four key actions to improve the fiscal regime and support the long-term future of the industry:
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- A substantial reduction in the headline rate of tax and an immediate review of headline rates with the aim of creating an internationally competitive tax regime in the North Sea.
- Removal of fiscal barriers for exploration and enhanced oil recovery (EOR).
- Fiscal reforms to improve access to decommissioning tax relief and encourage late life asset transfers – in order to reduce costs and help prevent premature cessation of production.
- Urgent consideration of additional non-fiscal support, such as government loan guarantees, to sustain investment in the sector.
SNP Energy spokesperson Callum McCaig MP (Aberdeen South) said last night: “After many months of sitting on his hands, the Chancellor must now step up to the mark and deliver the fiscal support that the oil and gas industry needs to protect jobs and secure recovery.
“Scotland’s oil and gas industry has contributed more than £300 billion to Treasury coffers and with 20 billion barrels still to be extracted the future can be bright – but it is vital that the UK government does its bit to support the industry through this difficult period.
“Successive UK governments since the 1970s have mishandled the huge income generated from Scotland’s oil and gas sector. At a difficult time for the industry it is imperative that the Chancellor takes the urgent action needed at this Budget to secure its future.”
“With a fortnight until the Budget it is time for the Chancellor to listen to the experts and take the long overdue decision to reduce the North Sea tax burden and introduce much-needed fiscal reforms.
“The efforts of the industry to improve efficiency, reduce operating costs and increase production must now be matched by UK government action to create a competitive tax regime that stimulates exploration and development, attracts investment and protects jobs – so that we can make the most of the North Sea basin’s continued potential.
“The SNP Scottish Government has taken the action it can to support those affected by the downturn through the Energy Jobs Taskforce – including £12 million in funding to help oil workers retrain in other fields – and £379 million investment in North East Scotland.”
Watch the debate via Scottish Energy News-TV at: http://parliamentlive.tv/Commons