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Industry still hopeful of respite on tax issues in Budget

Industry still hopeful of respite on tax issues in Budget
Oil and gas chiefs are still hopeful of new measures to offset some of the damage done by the UK Government's last Budget - despite no mention of the industry yesterday.

Oil and gas chiefs are still hopeful of new measures to offset some of the damage done by the UK Government’s last Budget – despite no mention of the industry yesterday.

Chancellor George Osborne said little in his autumn statement that would impact on the sector, although changes to the research and development tax credit regime were welcomed.

During a visit to Aberdeen last night, Energy Minister Charles Hendry said constructive talks are continuing between the industry and the Treasury and field allowances were being looked at.

“We recognise the industry’s disappointment (from the last Budget),” he said.

“A lot of good work has been going on and we want to see that move to a positive conclusion.”

He said the new fiscal forum announced at Offshore Europe, designed to make sure the government and industry met more regularly, was “a big step and means we are having a much closer engagement”.

Mr Hendry was in the Granite City to attend Apache’s industry dinner at Trinity Hall in Aberdeen.

Oil & Gas UK’s economics and commercial director, Mike Tholen, said: “Since the tax changes announced in the Budget, we have been engaged in constructive dialogue with the Treasury on the fiscal regime, particularly regarding ways to stimulate investment in uncommercial fields and to resolve the uncertainty around tax relief on decommissioning costs by Budget 2012.

“We consider it timely to wait until the Budget to address these matters and believe it would have been premature to see an announcement in the autumn statement.

“The Treasury did indicate that it would consult on measures to promote research and development by larger companies and on that we will look to engage.”

Aberdeen City and Shire Economic Future chairman Tom Smith said: “The oil and gas industry continues to perform well with growth forecasts well above the ones the chancellor has revised today. However, there was no recognition of this in the chancellor’s statement. We can only hope that this industry will get support from government in the Budget.

“Oil and gas must not be penalised but rather incentivised to continue to perform, creating jobs and wealth for Aberdeen City and Shire, Scotland and the UK.”

There was disappointment in the green energy sector. Gaynor Hartnell, chief executive of the Renewable Energy Association, said: “It makes strategic sense to invest in renewables, to help pull the UK out of the doldrums, yet the autumn statement lacks any specific new measures.

“There is certainly no evidence of the ‘ruthless’ focus on renewable energy called for by Nick Clegg earlier this year – the policy uncertainty across almost every aspect of renewables is draining investor confidence.”

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