Scottish Government seeks support for North Sea in UK Budget

Finance Secretary Derek Mackay
Finance Secretary Derek Mackay

Scotland’s finance secretary has written to chancellor Philip Hammond seeking support for the North Sea oil industry in the upcoming budget.

Mr Hammond will set out the UK Government’s financial plans on October 29.

Derek Mackay has asked the chancellor to provide support to address the “serious concern” of a lack of exploration activity, with only four exploration wells and five appraisal well spudded in the first eight months of the year.

He added that any increase in the tax rate would discourage any new investment, however Robert Jenrick, exchequer secretary to the Treasury, has previously insisted the tax regime would remain “highly competitive, stable and predictable”.

Mr Mackay is also seeking support for the supply chain as “the recovery is not being felt evenly across the sector” and to delivering the Oil and Gas Sector Deal.”

He said: “The UK Government must bring forward further measures to improve exploration activity which is essential to Maximising Economic Recovery and attract new investment, providing an immediate boost to the supply chain.

“It is essential that the you use the Budget to maintain fiscal stability and predictability which is critical for the oil and gas industry, any increases in the tax rate would discourage new investment.

“The UK Government needs to provide support to the industry in its ambitions to increase the total economic value of the North Sea, including delivering a strong Oil and Gas Sector Deal.”

The finance secretary also asked for support for renewables in Scotland, including more work to bring new technologies from development to commercialisation.

Mr Mackay also said the UK Government should “honour their manifesto pledge” in helping create an ultra-deep water port for decommissioning.

The Scottish Government recently backed Lerwick as the prime candidate for the work.