Scotland’s First Minister has called on the UK Government to lower taxes on the oil and gas industry in the forthcoming March Budget.
Nicola Sturgeon said Chancellor George Osborne should take “urgent action” to protect jobs in the North Sea as she convened a special session of the Scottish Cabinet in Edinburgh.
Ms Sturgeon said Finance Secretary John Swinney would seek an urgent meeting with the Chancellor to set out the Scottish Government’s view.
She also confirmed that the work of the energy jobs task force established last January and due to complete its work this month would be extended.
It follows the announcement that BP is to cut around 600 jobs in the North Sea amid plummeting oil prices.
The First Minister said the Scottish Government would work with the industry to help remove barriers to exploration, support the training and re-skilling of staff, enable technology to improve
production and address issues of access to finance.
She said: “There is no doubt the industry is currently facing an extremely challenging outlook, but oil and gas can continue to make a significant contribution to the Scottish economy and energy security for decades to come.
“However, this will only be achieved if we support the industry through this difficult period, encourage investment and ensure it remains well placed to benefit from a future upturn in oil prices.
“Cabinet today agreed to focus our efforts, along with those of the Energy Jobs Taskforce, on the key areas of skills, exploration, innovation, and access to finance.”
Ms Sturgeon continued: “The Scottish Government is taking action to support the industry at this difficult time, but this needs to be matched by a commitment from the UK Government to address the fiscal regime in which the industry operates.
“Only the Chancellor can deliver the competitive tax regime that the sector requires at this moment and following our discussions today, we will continue to make the case to the UK Government
for urgent action in the forthcoming Budget to lower the tax burden on the industry, a move that will help to protect jobs and investment.”
Downing Street said that Energy Secretary Amber Rudd delivered a presentation to the UK Cabinet this morning on the North Sea oil industry.
A Number 10 spokesman said the presentation was made “in the context of the falling oil price and the impact that is having on the oil industry”.
The spokesman added: “There was a discussion around that and around how we move forward to ensure that we continue to support that industry as much as we can.”
Scottish Energy Minister Fergus Ewing later told the Scottish Parliament that he is “not yet convinced” that the UK Government has taken on board the need to stimulate exploration in the North Sea.
“We have repeatedly called for more exploration because oil exploration has dropped to parlously low levels,” he said.
“In order to maintain the teams of expertise and people specifically in exploration there needs to be more work for them to do.”
He added: “It’s worth recognising that while tax is not the main focus of industry at the moment – quite frankly it is survival – tax is a necessary tool in the box that can contribute towards the objective of surviving to thrive thereafter.
“In particular, very many operators that I have met in the last few weeks of fairly intensive engagement with the industry, and I won’t name them, have said the same thing: there must be clarity of decommissioning liabilities.
“The lack of clarity is impeding investment, it is blocking deals. Those deals could secure the future of the constituents (of Aberdeen).
“Therefore, I do urge the UK Government to include in their spring budget the necessary steps, upon which I know they are obtaining advice, in order to allow those deals, to allow that investment, which will considerably assist the industry in its toughest challenge.”