Osborne’s lifeline plan for crisis-hit oil industry
SCOTLAND’S troubled oil and gas industry is set to be thrown a multimillion-pound lifeline.
George Osborne is considering plans to boost the industry by offering a tax break to North Sea firms.
With the oil price plummeting in recent months and major employers axing jobs, the crisis has become a top priority in recent UK Government Cabinet meetings.
Scottish Secretary Alistair Carmichael last night revealed that tax breaks are being considered as part of the Budget to be presented by the Chancellor in March.
Last week, oil industry veteran Sir Ian Wood urged the UK Government to cut a key tax on the sector’s profits by at least 10 per cent.
Mr Carmichael confirmed that this proposal is ‘in the mix at the moment’.
He said: ‘I’m arguing the case within government that the necessary steps have to be taken to support the industry so that when the price comes back, the industry is still there to take advantage of better times.
‘I’m not going to conduct Budget negotiations through the pages of a newspaper but I can accept – and the Chancellor and the Chief Secretary to the Treasury have already accepted – that the steep fall in oil prices gives us a new situation to which a new response is necessary.’
The price of a barrel of oil has fallen to below $50 in recent months, less than half its value during the summer. Experts predict it could slump to $31 by the end of March.
Major offshore firms BP and ConocoPhillips have already revealed 500 job cuts. PLAN: Mr Carmichael said: ‘ I’m acutely aware that the decision we make in the next few months sets the offshore industry on a direction from which there will be no turning back.’
First Minister Nicola Sturgeon has written to Prime Minister David Cameron calling for three immediate tax breaks, including a cut in the ‘supplementary charge on profits’, as proposed by Sir Ian Wood.
The supplementary charge is set at 30 per cent but the industry wants a cut by at least 10 per cent.
Last night, the SNP said it would make support for the North Sea a General Election priority. Mike Weir, the party’s energy spokesman at Westminster, said: ‘Successive Westminster governments have been quick to squeeze the industry at any opportunity, but when support is needed they are far slower off the mark. ‘A strong team of Nationalist MPs will ensure that the needs of the sector cannot be put on the back burner.’