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By Martin Kelly

Tax increases imposed by the UK Treasury have harmed investment and made things difficult for the oil and gas industry, experts have told MSPs.

Westminster's mismanagement of the North Sea fiscal regime was highlighted when industry figures and academics appeared in front of the Economy, Energy and Tourism Committee held in Aberdeen.

Appearing in front of the committee yesterday, Mike Tholen of Oil & Gas UK described the impact of the UK's record on the North Sea fiscal regime saying: "There have been too many changes and indeed most recently the tax increases have been very hard to bear by an industry which is trying to do some very difficult things."

His criticisms were echoed by industry expert, Professor Alex Kemp who also condemned the numerous fiscal changes.

Professor Kemp said: "Multiple changes in taxation arrangements make things very difficult for investors who are trying to make long run investment decisions"

"[Westminster's] record really, as far as taxation policy is concerned, and in terms of maximising economic recovery which is the widely accepted objective, it has left quite a bit to be desired."

The comments follow similar criticisms of the new 'bareboat charter' taxation plans by Colin Pearson of EY, who has warned that Westminster's latest tax raid on the North Sea could lead to a "scenario that sees a drop-off in the number of new developments" - while GDF Suez E&P UK have also made clear their concerns at the costs to the industry.

Speaking in a recent interview Colin Pearson described the oil and gas sector as 'booming'.

Commenting, SNP MSP Mike Mackenzie said:

"More and more experts are making clear the negative impact Westminster's mismanagement of the fiscal regime has had, and is having, on the North Sea.

"Rather than providing certainty and stability for the industry as he promised, David Cameron's government is simply using the North Sea as a cash cow – damaging the potential for further exploration and risking forcing drilling operations out of the North Sea in the process.

"In contrast, Scotland's Future makes clear that after independence, the Scottish Government will ensure a stable fiscal regime for the oil and gas sector – and will work with the industry to ensure the greatest benefit is extracted from the remaining 24 billion barrels of oil.

"A Yes vote will give Scotland the fiscal powers we need to support the industry ensuring it is no longer subject  to sudden and unexpected tax hikes by the UK Government, and will ensure the wealth from Scotland's oil will no longer be squandered, but will benefit future generations through the establishment of an oil fund."

Comments  

 
# gandkar 2014-04-29 14:21
Forty appears to be a very significant figure in the Scottish Oil & Gas sector. In the 1970's I was involved in the development of the Forties Field (which is still producing even though it was supposed to last only 25 years). Last year I believe the figure quoted to be invested in the North Sea Oil and Gas sector was £40 billion. The additional employment to support this investment was estimated to be around 40,000. The minimum shelf life for the Scottish Oil & Gas sector is probably 40 years. Oil Fund? of course we could have an oil fund. Come to think of it it's just over forty years since I started in the Oil Industry. My sons are still in it and will retire in it. Scottish fortitude will see us through!!
 
 
# From The Suburbs 2014-04-29 21:12
Don't bank on the pro Union BBC to report any of this.

Or that the Times Newspaper declared Putin as the international man of the year on 30th December 2013.
 
 
# Breeks 2014-04-30 09:29
OT But business related: China is now building houses with 3D printers.
Not pretty, but a tweak here and there they easily could be...

www.youtube.com/.../

It horrifies me as a tradesman, but I am forced to admit day by day I become more obsolete, not less.
 

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