Visiting Miliband to face plea for new oil and gas incentives
Pressure mounts for North Sea tax breaks
Published:
Business leaders will pile pressure on Energy and Climate Change Secretary Ed Miliband today for tax incentives to breath new life into the North Sea oil and gas industry.
Mr Miliband is making his first official visit to Aberdeen – more than a year after his appointment.
Colin Crosby, president of Aberdeen and Grampian Chamber of Commerce, said last night that the minister would be left in no doubt about the need for tax regime change to be included in next week’s pre-Budget report.
“If we want the oil and gas industry to prosper here, we have to have the right business environment,” Mr Crosby said.
“It is the pre-Budget report next week and we have to say to Chancellor Alistair Darling, via Mr Miliband, that we want the biggest incentives possible created to ensure that essential development and exploration work in the North Sea continues.
“We don’t want the chancellor to see the oil and gas industry as an easy hit for taxation. We will be making some firm messages to Mr Miliband.”
Mr Crosby said comments made earlier this month by Sir Ian Wood, chairman of Aberdeen-based global energy services business Wood Group, had struck a chord in government.
The entrepreneur said the North Sea oil and gas industry could be the saviour of the UK economy by hauling the country out of its massive debt.
But Sir Ian warned that the UK Government needed to get together with the industry to draw up a plan to maximise output and boost the economy for years to come.
Without action, he fears, nearly £800billion worth of oil and gas will remain untouched under the sea – denying the Treasury a massive income in tax receipts from its production.
Mr Crosby said the government should send the oil and gas industry a clear message that it wanted the sector to stay active in the UK for the long term.
Speaking to the Press and Journal before his trip, Mr Miliband vowed to listen to pleas from industry leaders for more government help to extract the maximum resources left in the North Sea.
But he had nothing specific to offer in reply to the calls for further changes to the offshore tax regime.
Mr Miliband made it clear that he and the government regarded the industry as vital in the struggle to maintain the security of energy supplies for the economy “and our way of life”.
He stressed that his department was also concerned with climate change, but added that he believed the oil and gas industry had “an incredibly important role” to play in the development of carbon-capture and storage technology.
Important
Mr Miliband was due to meet Aberdeen North Labour MP Frank Doran and Labour and union leaders for a political dinner after flying into the city last night.
He has various meetings planned in the city today.
Mr Miliband said he had met Sir Ian Wood and believed it was important for businessmen of his stature “to make the case and explain what they think needs to be done” and it was “absolutely our job to listen”.
He added: “We absolutely want to maximise resources in the most general sense from the North Sea because it is very important to the UK economy, energy security and as part of the bridge that takes us to a lower-carbon future.”
Mr Miliband also attacked the Tories for giving the impression a week ago that they could offer tax cuts offshore without saying how the cuts would be funded, and the SNP for proposing to take control of the North Sea in an energy document published last week.
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