Latest Unionist scares rubbished by Scottish government

Newsnet Main Articles

Wednesday, 01 February 2012 21:59

88 Comments

By G.A.Ponsonby
 
A claim by UK energy minister Charles Hendry that the independence referendum is causing uncertainty in the oil and gas industry has been ridiculed by the Scottish government.
 
Mr Hendry said that the independence referendum was "a point of uncertainty that could cause concern" to oil and gas firms.

In a letter to the industry trade association UK Oil & Gas, Hendry said that only the UK government could give it the influence in Europe and the "stable and consistent" regulatory and tax environment it needed.
 
Mr Hendry’s comments came as Westminster launched the latest round of licenses for companies looking to exploit the waters around Scotland.

However the Scottish government have dismissed the claim as "the height of hypocrisy" and have instead said the only uncertainty experienced recently was when the UK coalition introduced a 60% tax hike on the sector that saw taxes rise from 20% to 32%.

SNP Westminster Energy spokesperson Mike Weir MP poured scorn on Mr Hendry’s claim and called the hypocrisy “breathtaking”.

Mr Weir said the tax hike would cost the sector an extra £2 billion a year and thousands of jobs and added:

“The reality is that the only uncertainty over the future of the offshore industry has been caused by the UK Government who have launched damaging tax grabs on the industry without consultation leading to delays in investment and causing uncertainty.

“Charles Hendry should reflect on the fact that, while Scotland has a trillion pound North Sea asset base –  the UK’s national debt has broken through the £1 trillion mark for the first time."

Mr Weir highlighted industry predictions that oil would soon hit $200 a barrel and insisted that independence was vital for Scotland if the people were to gain control over the nation’s resources.

He added:

“We already know the Treasury is set to take in £13 billion this year, relying on North Sea revenues to boost Treasury coffers at the same time as it seeks to punish the North Sea with unfair taxes that, according to the industry, could put some of this future investment at risk.

“An assessment of Scotland’s geographical share of the North Sea demonstrates clearly that Scotland is more than able to stand on our own two feet with access to our own resources.

“When all of Scotland’s resources are included in our nation’s economic output, an independent Scotland would be ranked sixth in the world league table of OECD nations in terms of gross domestic product per head – ten places ahead of the UK at sixteen.”

Last year the UK coalition’s tax increases were met with anger by leading figures in the oil and gas sector who claimed it had damaged trust and would harm investment.

A survey carried out by Aberdeen and Grampian Chamber of Commerce in November last year revealed that half the operating companies polled reported that the tax increase had reduced their investment plans.  Another fifth believed that the tax measure had reduced operational activity.

Bob Ruddiman, Head of Energy at McGrigors, said at the time: "The prediction of seasoned industry observers of how the sudden Budget tax increase would dent confidence and undermine trust in the UK oil and gas industry has been borne out by this survey.”

The UK Minister’s claim of uncertainty is the latest in a series of negative assertions from Unionist politicians worried about Scotland’s independence referendum.

However, the claims have been undermined by a number of major international investments from firms including of Avaloq, Dell, Gamesa, Amazon and Michelin.

Yesterday Korean giant Samsung Heavy Industries announced it is to invest £100 million in Fife as part of its renewable plans.  The investment could see 500 jobs being created.