UK mini-budget: SNP laments lack of fresh fiscal support for N. Sea energy sector

Callum McCaig, MP
Callum McCaig, MP

In his political response, Aberdeen MP Callum McCaig – the SNP’s Energy spokesman in the Commons – said the Autumn Statement proved that ‘the UK government is happy to use the North Sea as a cash cow – only to abandon the oil and gas sector in difficult times.’
 
McCaig explained: “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.
 
“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.”

Scottish Finance Minister  Derek Mackay, MSP, added: “Hammond’s Autumn Statement is effectively tinkering around the edges and while I welcome the focus on capital expenditure, which I have been calling for, there is still not enough to help hard pressed families.

“It is also deeply disappointing that the Chancellor has chosen not implemented the strong package of support needed for the North Sea, and affected communities, which continues to be impacted by low oil prices.

Elsewhere, Hammond’s decision to increase UK infrastructure spending means that the Scottish Government’s budget will increase by around £160 million a year in Barnet consequentials for the next five years.

This is the kind of ‘small change’ from its annual £30 billion budget which the Scot-Govt holds each year for contingencies – such as flooding or other winter-weather related emergencies.

David Mundell, MP, the Minister for Scotland in the British government, commented: “This is as a result of the Chancellor’s decision to invest in infrastructure, but it is for the Scottish Government to step up now.

“If it is used properly by the Scottish Government, this will make a real difference to productivity, jobs and growth in Scotland.“

The Scottish government’s Draft Budget for 2017-18 will be published on 15 December 2016.

 

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed