Scottish Labour leader calls for industry ‘resilience fund’

The Labour MP expressed concern about the “human impact” of redundancies in the energy sector and the wider impact of a downturn on the local economy.He argued the Scottish Government should use money received from Westminster via the Barnett Formula to immediately set up a pot of cash that can be drawn upon to protect local communities.He said: “You cannot, in one country, prevent the entire collapse of the oil price, but what you can do is offset the human consequence and the industry consequence.

“I want the Scottish Government to do things differently. I want them to set up what I would call a resilience fund. I want to announce today that this is an approach the Scottish Labour party would take if i was first minister.

“Put briefly, it is an idea that there would be a specific Scottish Government pot of money set aside for economic shocks that affect a town a city or a local authority.

“Local authorities on behalf of their area would make applications for use of this fund. There is no reason why this shouldn’t happen right now.”

Mr Murphy said there was more than £100million available from Barnett consquentials in the Chancellor’s recent Autumn Statement that is “as yet unspent”.

He insisted it would only be for use in “unique” circumstances, and that the Scottish Government would decide in which areas it could be spent.

Mr Murphy also used his visit to the north-east to urge the UK Government to fast-track changes to the oil and gas fiscal regime recently announced by George Osborne.

The Chancellor has already pledged to further reduce the industry’s supplementary corporation tax on profits following the reduction to 30%, from 32% outlined in the Autumn Statement.

There have since been reports that Westminster may consider scrapping the supplementary charge altogether, which would cut the overall tax burden by half.

Mr Osborne also said that the ring-fenced expenditure supplement would be extended from six to 10 years, allowing investors a longer period to offset their costs against future production. A new cluster area allowance would also be created, to encourage investment in high pressure and high temperature fields.

However, Mr Murphy argued there should be more urgency.

He said: “What we want to see is that the announcements that were made, let’s not hang around, let’s get those proposals implemented in quicker time than was earlier announced.

“The Labour party will support them, will give them our backing if it is about helping the industry in the north-east.”

The East Renfrewshire MP also gave his full backing to a call from Aberdeen City Council leader Jenny Laing for a “summit” between oil and gas industry leaders, UK and Scottish governments and the local authority in the city.

So far, no date has been set, but Mr Murphy insisted it was “urgent and necessary”.

He added: “If it continues that no date can be found in everyone’s diaries, instead of waiting for the two governments to come to Aberdeen, then I will lead a delegation from Aberdeen to go and meet both the Scottish and UK governments. I hope it doesn’t come to that.”