The chancellor is poised to snub further pleas for help from the oil and gas industry amid the continuing downturn.
During an exclusive interview, Philip Hammond’s right-hand man David Gauke indicated the sector should not expect additional support in the Autumn Statement.
And he refused to make new pledges or promises given the “very recent” measures brought in by George Osborne.
The chief secretary to the Treasury told the P&J his boss was unlikely to reverse the “substantial steps” in the last Budget.
But asked whether the industry could expect further support next month, the minister said only that all taxes are kept under review.
His comments immediately prompted claims the UK Government was “washing its hands” of the North Sea following calls for incentives for exploration.
In March, the UK Government scrapped the petroleum revenue tax (PRT) and halved the supplementary charge to 10% – backdated to the start of the year.
Oil and Gas UK, which had lobbied for cuts, said the measures would significantly reduce the headline rate of tax paid on oil and gas production.
But the Office for Budget Responsibility’s fiscal outlook forecast the industry would continue to suffer – even with the changes.
And although broadly welcomed, some accused Mr Osborne of missing an opportunity to be more radical by axing the supplementary charge entirely.
Speaking to the P&J yesterday at the Tory party conference in Birmingham, Mr Gauke insisted North Sea oil and gas was “really important to us”.
He added: “I think the Government responded in the last Budget very significantly in terms of what we did with Petroleum Revenue Tax and the surcharge.
“That demonstrates we were prepared to take action to help the oil sector. We will keep that under review but given we have very substantially reduced taxes in this area, that’s a substantial step to help.”
Asked if Mr Hammond would continue in the same vein, Mr Gauke replied: “I can’t see him reversing that in the current circumstances, notwithstanding a slight increase in the oil price.
“But obviously the fundamental issue is the world price for oil. That’s not something we control.”
Asked if the industry should expect anything in the Autumn Statement in terms of support, he said: “We did take very significant steps in the Budget. That reduced the tax burden very significantly.”
Pressed to confirm if that was a no, he added: “All taxes are kept under review, but I don’t want to be making any promises or new pledges given we have acted in this sector only very recently.”
Aberdeen South MP Callum McCaig hit out at the comments, arguing it was “crystal clear” the oil and gas industry needed further Treasury help to support at risk jobs and ensure the recent “encouraging increases” in production are maintained.
The SNP’s energy spokesman at Westminster added: “Nobody expects the UK Government to control the price of oil, but we in Aberdeen do expect them to use the levers that they have.
“The introduction of incentives for exploration would provide a welcome shot in the arm to the industry and help support employment and tax revenues for decades to come.
“The Tory government cannot simply wipe its hands of responsibility and it must take action to support this vital industry.”
Liam McArthur, Scottish Liberal Democrat energy spokesman, insisted the last thing Scotland’s energy firms needed was for the UK Government to “wash its hands” of the oil and gas sector.
The Orkney MSP added: “We were assured when the UK Government scrapped the Department for Energy and Climate Change that supporting the North Sea industry would remain a priority, but these comments send exactly the wrong message.”
Scottish Labour’s economy spokeswoman Jackie Baillie accused the Conservatives of thinking it was “job done because of tax cuts”, adding: “That isn’t good enough.”
She added: “The UK Government …should establish a public body to protect important assets at times of volatility in the oil price, look towards investment in decommissioning for when the time comes, and promote the exporting of the skills that Scotland has to capture opportunities in the rest of the world.”
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