UK Energy Secretary Ed Davey has admitted that last year’s £10billion tax raid on the offshore sector was a “mistake” – and confirmed his department had been bypassed by the Treasury.
He said yesterday that the Department of Energy and Climate Change (Decc) had been a “bit unsighted” over the 2011 Budget decision, which plunged the industry into chaos.
However, the Liberal Democrat – tipped as a future leader of the party – said he believed relations between UK ministers and industry leaders were now stronger than ever, following well-received measures in this year’s Budget on field allowances and decommissioning certainty.
Mr Davey became energy and climate change secretary in February, replacing Chris Huhne, who quit after being charged with perverting the course of justice.
“I think the relationship is probably better than it has ever been,” Mr Davey told the Press and Journal yesterday.
“I think we’ve just got to understand each other better.
“We’ve got to avoid making the mistakes that have happened in the past because it’s critical, if you’re making these long-term investments, that investors see stability and can be reassured things aren’t going to change suddenly.”
Asked if he was referring to the 2011 Budget, Mr Davey said: “That might be one of the things that irritated them, but Decc was a bit unsighted on that Budget proposal.”
Mr Davey praised the “booming” oil and gas sector and spoke of his hopes that the skills base in the north-east could diversify into renewables in the future.
“Britain’s oil and gas industry is right at the top, globally, and is a fantastic part of our economy,” he said.
“We’ve got to make sure that we are maximising the potential for oil and gas from the North Sea, west of Shetland.
“Those skills from what is a booming industry can directly move across to low carbon, whether that’s renewables in their many different flavours or carbon capture and storage.
“I think the only problem we have is that the oil and gas industry is booming so much – I mean it really is just booming and it’s an unspoken story about how fantastically well it’s going – that they’ve got a skills shortage themselves. It’s not like they’ve got lots of spare skills.
“However, when I talk to (industry body) Oil and Gas UK when I’ve gone to Aberdeen, there’s a real appetite to work with the renewables industry to see where the synergies might be.”