Alex Salmond was quoted in Energy Voice’s sister publication, the Press and Journal yesterday, as saying that “oil was too important to leave to Westminster”.
Given that he based his projections for an independent Scotland on $110 a barrel and got it very, very wrong, I would agree with the majority of Scottish people that oil is far too important to leave to him.
The continuing fall in the price of oil, while good for reducing pump prices and keeping costs down, is clearly a huge issue for the 375,000 people across the UK who work in the oil industry and related activities.
But the industry – and its workers – have ridden many storms, and I know that with the continued support of the UK Government and the new Oil and Gas Authority it will ride out this one.
As a Highland MP as well as chief secretary to the Treasury, I have brought Aberdeen’s concerns into the heart of Westminster, and am acting, right now, to support Scotland’s oil industry.
That’s because I know that it’s not just about the North Sea rigs or even just about Aberdeen, important though those things are.
Oil is hugely important for the UK’s overall economy, and if we want to continue being one of the fastest growing developed economies in the world we need to protect and support our most valuable industries.
Alex Salmond called yesterday for an investment allowance, claiming that Aberdeen University has calculated that this would protect thousands of jobs.
I have not only been quoting the experts, I’ve been listening to them and working with them, which is why I announced an investment allowance in December.
I have pushed through radical reforms to how the government approaches the oil industry at the Treasury – as well as guaranteeing tax relief for the decommissioning of ageing infrastructure, we are designing a basin-wide investment allowance and supporting seismic surveys to boost offshore exploration.
This will encourage £7billion of additional investment in the industry, long-term, sustainable investment to protect Aberdeen, Scotland the wider UK economy.
It’s long-term thinking like this that has been praised by the industry – our “spirit of co-operation” was welcomed by the industry’s spokesperson, Oil & Gas UK chief executive Malcolm Webb.
This is actual, concrete government action that is already under way and helping the industry across the North Sea.
All the help that I announced at Autumn Statement last month will be in place by March’s Budget – and we will consider going further at Budget if needed.
I have been able to implement these tax cuts and bring in government support because Scotland’s North Sea oil industry is supported by the UK Government’s broad shoulders.
Indeed, Scotland’s public finances more widely are supported by our broad fiscal base.
The independent Office of Budget Responsibility’s December price forecast suggested that Scottish oil revenues would be £2.3billion in 2016-17, based on $86 per barrel.
This calculation, made when oil prices were around $30 a barrel more than they stand currently, would make every person in Scotland – that’s you, me and everyone who works in Aberdeen’s oil industry – £1,100 per head worse off in an independent Scotland than Mr Salmond predicted.
That’s more than £1,000 per person less for our NHS, for our schools, for our public finances as whole.
We all know that oil prices are volatile. We all know that in a year, or even a month, the picture could look very different.
That’s why I, and the UK Government, are taking a long view on the issue – supporting Scotland’s oil industry through encouraging investment, protecting Scotland and the UK’s public finances through a sustainable tax regime, and ensuring that jobs and livelihoods across the North Sea are protected for many years to come.
Danny Alexander is Chief Secretary to the Treasury and an MP for the Inverness, Nairn, Badentoch and Strathspey constituency
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