The March Budget must finally deliver for the North Sea oil and gas industry and its highly skilled workforce said Deputy First Minister and Finance Secretary John Swinney.

In a letter to the Chancellor ahead of his statement, Mr Swinney set out urgent action the UK Government must take to support this critical industry, including:

• immediate action to substantially reduce the overall tax burden in the industry
• the removal of fiscal barriers to exploration and enhanced oil recovery
• improved access to decommissioning tax relief
• urgent consideration of non-fiscal support, such as government loan guarantees

The Scottish Government continues to do all it can to support the sector, which itself is working hard to adapt to lower oil prices. However, the UK Government retains the key economic levers affecting the oil and gas industry.

In the letter, the Deputy First Minister highlighted industry analysis has since confirmed the serious challenges the sector faces, and the stark drop off in investment over the previous year.

Mr Swinney said:

“Scotland’s oil and gas sector is one of our country’s main industrial and economic success stories. However, the industry and its workforce are currently facing a range of challenges.

“Indecision and inconsistency in energy policy from Westminster has placed Scottish investment and jobs at risk.

“We are using our devolved powers to provide support where possible, for example establishing the Energy Jobs Taskforce, and introducing a new £12 million Transition Training Fund to support workers transition into other roles in energy and other sectors.

“Today I repeat my calls for immediate action from the Chancellor in his March Budget to ensure the significant potential of the North Sea is realised. The Scottish Government has been engaging with the industry, unions, and the Oil and Gas Authority to address the challenges facing the Oil and Gas sector. There is consensus across stakeholders that the loss of highly skilled workers and critical infrastructure could be realised if urgent action is not taken.

“UK Government inaction at this time could threaten the prosperity of the oil and gas industry. I look forward to the steps I hope the Chancellor will take to support the oil and gas industry in the Budget.”

Notes To Editors

For full text of letter visit : http://news.scotland.gov.uk/News/Austerity-100billion-loss-to-UK-economy-23b2.aspx

Contact Information

SG Communications

SGCommunications@scot.gov.uk