Scotland’s Oil and Gas Sector ‘in Need of Urgent Support’, Says Deputy First Minister
February 16, 2016
The oil and gas industry in Scotland is in need of urgent support from the UK government, according to Scotland’s deputy first minister John Swinney.
In a letter sent to the UK chancellor George Osborne, Mr Swinney called on lawmakers in London to consider reducing the headline rate of tax affecting energy firms in order to support their activities and operations in Scotland.
Mr Swinney has argued that support for the oil and gas industry in Scotland needs to come quickly and ought to be aimed primarily at helping companies maintain and expand their activities in the North Sea.
The deputy first minister is also calling for the removal of what he calls “fiscal barriers” and anything that might make it more difficult for energy sector employers to continue their work off the coastlines of Scotland.
Among the key concerns outlined by Mr Swinney in his letter to George Osborne is the fear that critical infrastructure might be decommissioned early if confidence in the industry is persistently eroded and international energy prices fall any further than they have sunk in recent quarters.
“The North Sea oil and gas industry is facing substantial challenges. The industry, unions, and the Oil and Gas Authority have all raised concerns about the loss of highly skilled workers, and confidence levels are now at their lowest since records began in 2009,” Mr Swinney wrote in his letter.
“The Scottish Government will continue to do all it can to support the sector. It is clear, however, that the UK Government must take urgent action to reduce the headline rate of tax at the March Budget. The fiscal regime must not be a barrier to investment and activity in the North Sea.”
The deputy first minister also wrote of his regret that the Chancellor has not yet acted on his earlier advice to make policy changes in support of Scotland and the UK’s energy industry.
“I believe the measures that I called for would have helped mitigate the effects of the current oil price shock,” he wrote.
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