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Colin Clark MP: Oil and gas goes ‘way beyond north-east of Scotland’

Colin Clark, MP for Gordon.
Colin Clark, MP for Gordon.

The North Sea oil and gas industry is vital to my constituency of Gordon, Aberdeenshire, but also to the wider north-east, Scottish and indeed UK economy.

I have spoken in the Commons chamber on many occasions since being elected in June last year about the importance of this sector and the 300,000 jobs it supports.

I have visited countless companies in Gordon in recent months that are doing great work through what has been one of the toughest periods in its history.

Today, I am very pleased to have secured a parliamentary debate on the state of the industry and to look at what lies ahead in the future.

The level of interest from other MPs seeking to take part is an indication that oil and gas goes way beyond the north-east of Scotland and acts as a driver of growth in many parts of the economy.

The industry has shown great resilience through the downturn, and there are promising signs of recovery despite some recent announcements of further job losses.

Oil and Gas UK expects more new investment this year than in the previous three years combined.

Production is set to increase by 5%, which would be 20% higher than five years ago. Unit operating costs have halved since 2014 and post-tax cash flow is at its highest rate in seven years.

Geographically, the industry remains very much rooted in the north-east of Scotland, and if industry and government can work together, we can ensure that continues to be the case for a long time to come.

That aspiration to anchor the supply chain companies in the north-east, exporting skills and expertise around the world, was at the heart of the UK Government-driven Aberdeen City Region Deal.

However, the need for support does not end with the investment in the City Deal.

The basin requires fresh capital investment, with drilling activity still perilously low.

BEIS (Department of Business Energy and Industrial Strategy) statistics have predicted that oil and gas will still provide two-thirds of total primary energy by 2035.

It must remain a vital component of an energy policy that considers affordability, security of supply and environmental sustainability.

Those of us on the Conservative benches are very supportive of the industry-led proposal for a sector deal for oil and gas.

This government has already taken unprecedented steps to support the sector, with tax breaks totalling £2.3billion in recent years, the establishment of the Oil and Gas Authority and, most recently, the introduction of a policy of Transferable Tax History (TTH).

That is something that my party colleagues and I worked very hard to secure. The policy can help unlock up to £40billion of investment in the UKCS.

Backing for a sector deal can drive further advances in technology, with benefits for the wider economy.

There must also be support for our supply chain, which is already worth £30bn but has the potential to double in size.

Both the UK and Scottish governments must continue to do all that we can to support this vital industry and ensure it prospers for many more years to come.

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