The UK Government’s controversial tax raid on the UK oil and gas industry was described as unwelcome and unhelpful at a gathering of business leaders in Aberdeen last night.
Joining in the wave of criticism of Chancellor George Osborne’s £10billion hit on the sector in his last Budget was CBI Scotland chairwoman Nosheena Mobarik.
Speaking at the business group’s annual north-east dinner at the Hilton Aberdeen Treetops hotel, Mrs Mobarik said: “We have made it very clear to the UK Government that this was most unhelpful. It is not helpful for any government to spring a tax surprise on any sector of the business community, particularly having previously appeared to rule out such a measure.”
She said it was vitally important for the oil and gas industry and the myriad of firms supporting it for the government to show the right kind of support.
“There is still an abundance of oil and gas that can be extracted from the North Sea and west of Shetland in the years ahead,” she added.
Mrs Mobarik also said she agreed with the view of industry body Oil and Gas UK that Aberdeen had the potential to sustain its position as a leading provider of oil field-related goods and services, both to the UK and other countries around the world.
But governments needed to help by creating the right regulatory and tax environment to make this possible and create as much stability and certainty as possible, she added.
Addressing around 130 guests, including Scottish Finance Secretary John Swinney, who was the after-dinner speaker, Mrs Mobarik said the overall economic outlook was not as bleak as many people feared.
“There is overall growth in the world today,” she said, adding: “The latest year-on-year growth figures in the United States came in surprisingly high at 2.5%.
“If we can resolve the problems of the eurozone going forward, there is every chance that we may see a fresh tailwind pushing us towards better times.”
She said the CBI did not share the view of “those who argue that the UK Government is consolidating the public finances too far and too fast”.
Mrs Mobarik added: “This year, the interest bill on the UK national debt will be around £45billion.
“That will rise to £60billion a year by the time the consolidation reaches its peak.
“These billions simply don’t disappear into thin air – they add cumulatively to the national debt over time and increasingly act like a lead weight around the neck of our economy.
“Any weakening of the UK Government’s resolve to tackle this deficit could well result in the international financial markets putting a premium on the country’s cost of borrowing in the form of higher interest rates and making a bad situation much worse.
In his speech, Mr Swinney covered the Scottish Government’s economic strategy and recent spending review.