Oil leaders call for new tax cuts

Alistair Darling in front of the Better Together in Aberdeen
Alistair Darling in front of the Better Together in Aberdeen

Oil and gas leaders have called for new tax cuts for the industry after official forecasts for future North Sea revenues were slashed.

The Office for Budget Responsibility (OBR) downgraded its projections for the sector by £20billion over the period to 2040 in a report out yesterday.

The move – the latest in a series of OBR forecasts for offshore receipts to be revised down – sparked a renewed war of words over Scottish independence.

Former chancellor Alistair Darling, leader of the No campaign, claimed it showed an economy that was reliant on the declining resource, which would “put the future of our schools and hospitals at risk”.

First Minister Alex Salmond said most experts disagreed with the figures.

Industry body Oil and Gas UK said the forecast proved the need for further tax incentives to maximise returns.

A spokesman said: “The OBR figures released today are a reminder of the opportunities that could be missed if the UK fiscal and regulatory environment for oil and gas does not support maximising economic recovery of our indigenous oil and gas resources.

“Oil and Gas UK is confident recent initiatives such as the Wood Review and the upcoming fiscal consultation with HM Treasury will enable the full economic value of the nation’s oil and gas to be realised.

“A lightening of the tax burden at this critical stage in the life of the maturing UK Continental Shelf could deliver substantial future tax revenues that otherwise wouldn’t arise – as the chief secretary (Danny Alexander) acknowledged at the Oil and Gas UK conference last month.”

Mr Darling seized on the report while on a visit to Aberdeen.

“Alex Salmond’s claims on oil have already been proven to be spectacularly wrong,” he said.

“Now he wants us to put the future of our schools and hospitals at risk on the basis of nothing more than his dodgy projections.

“This is a risk that we simply don’t have to take.”

Mr Salmond, the SNP leader, said: “The OBR are suggesting 10billion barrels of oil and gas remaining. Oil and Gas UK say up to 24billion barrels. The professor of geology at Aberdeen University says it’s more like over 30billion barrels.

“Now, all of these people know infinitely more about the extent of the reserves remaining in the North Sea than the Office of Budget Responsibility in London does.

“I think they should start talking to the experts.”