Oil price collapse a ‘serious threat to our economy’

THE dramatic oil price collapse is now a ‘serious threat to our economic wellbeing’, according to a report from MSPs.

Holyrood’s economy committee will release the findings of its inquiry today, while a separate survey will reveal that confidence among Scotland’s small businesses has slumped to a near three-year low – and significantly trails the rest of the UK.

The price of Brent crude oil – the international benchmark – has crashed below $30 a barrel for the first time in more than a decade and experts fear it could fall to as little as $10.

The situation is disastrous for the North Sea industry and last week, oil giant BP announced plans to slash 600 jobs.

In today’s report, the cross-party group of MSPs will call for ‘sustained joint action’ to ensure the maximum recovery of the remaining oil and gas from the North Sea, before the industry is decommissioned.

Tory MSP Murdo Fraser said: ‘Scotland’s oil industry has a vital status within the Scottish and UK economy. The challenges the industry is facing represent a serious threat to our economic wellbeing, especially to the livelihoods of those employed in the industry and those communities who depend on it.

‘We call on all involved to continue to work together to maximise the economic recovery of oil and gas.’

Meanwhile, Scottish small business confidence has fallen to its lowest level since the start of 2013, the latest report from the Federation of Small Businesses (FSB) reveals.

The study, conducted in the final three months of 2015, shows a widening gap between Scottish business growth expectations and the UK average, likely to be due to the decline of the oil industry.

The FSB’s ‘confidence index’ now stands at +0.3 points, down from +4.6 points the previous year, and markedly below the UK figure of +21.7 points. Scottish policy convenor Andy Willox said: ‘The creeping gap between Scottish small business confidence and the UK average is a cause for concern.’