There is a sad irony in the fact that the Westminster Parliament, which has benefited in excess of £300 billion in tax revenues from the North Sea should be so reluctant to offer the support needed to protect jobs and preserve a huge contributor to the UK economy.
It should not be forgotten that even in these difficult times for the sector, it supports employment for approximately 375,000 people across the UK. That is clearly focused on Aberdeen, which likely explains the higher support for the industry from my SNP colleagues, but the reality is that jobs related to the industry are found in every corner of the UK.
The tax changes announced in this year’s budget were widely welcomed by the oil and gas industry. At the time they were made the Treasury anticipated these new measures would pay for themselves through increased activity. It is a simple formula: incentives boosts activity resulting in higher income from taxation. In a globally competitive industry, mature fields such as the North Sea must adapt to survive and remain competitive- and the right support from governments is crucial for this.
Last Thursday my colleagues Kirsty Blackman MP, Stuart Donaldson MP, and I made sure the concerns of the industry were heard loud and clear during questions to the Secretary of State for Energy and Climate Change. We will continue to push for the support required to secure a bright future for the oil and gas industry and all it employs.
The cost of failure would be the premature demise of a fantastic industry and a requirement to import more of our energy needs; further damaging the UK’s balance of payments. There is a major challenge facing the industry in terms of reducing costs, but there needs to be assistance from Government to incentivise exploration, and develop marginal fields.
The prize on offer is 20 billion barrels, energy self-reliance, and hundreds of thousands of jobs in Scotland and across the UK. We cannot allow ourselves to jeopardise the future of the oil and gas industry, and fail where we need to succeed.
Callum McCaig is an MP for Aberdeen South and the Shadow SNP Westminster Group Leader (Energy and Climate Change).
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