A raft of new measures brought in to support the North Sea oil and gas industry have been described as a “mixed bag” by an Aberdeen politician.
Callum McCaig claimed Chancellor George Osborne had “caved” to pressure from the SNP as he reduced the Supplementary Tax rate from 20% to 10% while also abolishing the Petroleum Revenue Tax.
During his Budget speech, the Conservative politician had referenced the Scottish Independence debate as he claimed only the fresh measures implemented by the UK Government could support the challenges currently faced by the oil and gas industry.
In an exclusive opinion piece Chancellor George Osborne claimed nowhere were the challenges “clearer” than the one felt by those working in the energy industry.
The Aberdeen South MP said:”Today’s budget was a mixed bag from the chancellor. I welcome the fact that he caved to pressure from the SNP, industry and Trade Unions to cut he headline rate of tax and welcome the changes around about decommissioning relief, the chancellor could have and should have gone further.
“Tax on oil and gas will now be 40% for the majority of fields compared to corporation tax onshore of 17%. Petroleum Revenue Tax is being abolished, which may help secure some infrastructure, but no explanation has been given between the different rates of PRT fields and Supplementary charge fields.
“There was nothing on incentives for exploration, no effort was made to remove the fiscal barriers to enhanced oil recovery and crucially there was nothing on loan guarantees to ensure companies have access to finance.
“Successive chancellors have treated the North Sea like absentee landlords. George Osborne has sat on his hands for a full year and now belatedly acted. What has been announced will go some way to helping the North Sea, but it cannot be the end of the assistance if the Oil and gas industry is to flourish again in the future.”
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