The Treasury is “playing a dangerous game” with its “radio silence” on tax changes in the North Sea oil and gas industry, the shadow chancellor Ed Balls has warned.
He said the Chancellor has failed to “understand the urgency of the situation” facing the stricken industry, which is braced for further job losses against a backdrop of falling oil prices.
Industry body Oil and Gas UK has called for urgent tax cuts, and at a summit in Aberdeen at the start of this month, the UK Government said it was working with the sector as a matter of urgency.
George Osborne announced a programme of reform across the oil and gas tax regime in December and implemented an immediate cut to the Supplementary Charge levied against oil firms.
In January, the Government launched a “fast-tracked consultation” into a new allowance designed to reward investment in the North Sea.
Mr Osborne also promised to provide further support to industry in his March 2015 Budget.
Mr Balls said the Government needed to act faster.
“I am really surprised we have not had any proper signal from the Treasury about the North Sea and taxation,” he said.
“I didn’t think they should just let this sit until the Budget.
“The way that George Osborne and the Treasury are acting on this smacks of complacency.
“This is a very, very serious issue for our revenues and for jobs and investment in the North Sea, and the fact that we have had pretty much radio silence from the Treasury three weeks on…the Treasury is playing a dangerous game.
“I don’t think George Osborne is understanding the urgency of the situation and the need for him to be looking at more radical solutions.”
The Treasury said Mr Osborne met with Oil & Gas UK on Wednesday and speaking at a press conference with the OECD earlier this week, he said: “I want to say something particularly about the North Sea oil and gas industry.
“Overall, the fall in the oil price is good for the British economy and very welcome news for British families.
“But as today’s report makes clear, that is of little comfort to the many thousands who work in our brilliant oil and gas industry.
“Today, I want the hardworking people whose livelihood depends on the oil and gas industry to know that the British Government is standing alongside them – and we will do everything we can to help.
“We’ve already cut taxes – and if we need to we will do so again in the Budget.
“The oil and gas industry is a vital national asset, and we have a plan to back it.”