Chancellor George Osborne has insisted the Conservatives are “110% committed” to the North Sea, despite a survey showing almost half of oil and gas workers have little confidence in the Government’s recent support plan.
On the General Election campaign trail in Aberdeenshire, Mr Osborne said he is “absolutely determined” to support the industry, which he hailed as a “great national asset”.
With the North Sea having been hit by plunging oil prices, Mr Osborne used his Budget last month to unveil a £1.3 billion support package including a cut in the supplementary charge – the headline tax paid by the industry.
An investment allowance will be introduced to boost activity in the sector, while the Government is also creating a £20 million fund for new surveys of the UK continental shelf, which is also aimed at increasing exploration.
Mr Osborne said: “I’m absolutely determined we support the oil and gas industry.”
But an industry survey today revealed almost three-quarters of oil and gas workers (71%) are looking for work outside of the UK, with lack of job security cited as the main reason.
The research, by industry website Rigzone, also found 45% of people working in Scotland and 44% of those working elsewhere in the UK have little confidence in the ability of the tax cuts to stimulate investment.
But Mr Osborne stressed the importance of having a “clear and decisive plan for supporting the North Sea” as he highlighted the action the UK Government has already taken.
As well as reducing the supplementary charge from 30% to 20%, the Chancellor said: “In order to secure the future of the industry we’re going to be investing in seismic surveys to find new oil and gas deposits, we’re going to be introducing a new investment allowance so we encourage companies from across the world to come here and look for new oil and gas and extract the oil and gas that is in the ground.
“Our objective is to make sure we extract the absolute maximum amount of oil and gas from this great national asset.”
He added: “We are 110% committed to it and I think the plans we have going forward for the new tax breaks, the new investment allowance, all overseen by a new Oil and Gas Authority, to make sure we have a joined-up approach across the industry shows the seriousness of our commitment to this world-class industry.”
The Chancellor today visited McIntosh Plant Hire near Westhill, Aberdeenshire, a company which benefits from being part of the oil and gas supply chain.
He said: “We’ve taken action recently in the Budget to cut the taxes on North Sea oil so we could support the industry at this difficult time when the world oil price has fallen.
“The kind of package we’ve put in place to help the oil industry would not have been possible in an independent Scotland, it would have been far too expensive for an independent Scotland, so it reminded everyone of the benefits of the United Kingdom. But it’s also an industry that is so important to our country’s future.”
He said a new report by the International Monetary Fund had highlighted “the risk of a low oil price to parts of the Scottish economy”, and added: “That is precisely why we want a strong economic plan, to make sure those risks don’t materialise, that we support Scotland, that we support the jobs in the oil and gas industry, that we act as one United Kingdom to help the entire country.
“That’s why it’s really important we have a strong Conservative government led by David Cameron with strong Scottish Conservative MPs.”