An overwhelming majority of bosses in the oil and gas industry fear a jump in taxation if Scotland becomes independent, a new report says today.
The study by professional services firm EY and Aberdeen and Grampian Chamber of Commerce (AGCC) reveals more than three-quarters (79%) of senior executives among 140 canvassed believe a post-independence government will turn to their sector for more cash.
And well over half (62%) are convinced independence will lead to more regulation.
But EY’s report, Grasping the Thistle, also says nearly two-thirds (64%) of bosses believe the referendum debate is having no impact on current levels of North Sea investment.
The fears about tax and regulation are a major blow to the Yes campaign for an independent Scotland.
Speaking on the eve of the report’s publication today, Aberdeen-based EY tax partner Colin Pearson said: “The Scottish Government has consistently stated that taxes would be reduced generally or in some targeted fashion following a Yes vote to promote Scotland’s economic prosperity.
“However, the results of our survey appear to suggest that oil and gas executives presently do not believe that this would apply to them.
“The surprise tax rise introduced in the 2011 Budget may have rocked the industry but subsequent announcements, including the creation of decommissioning relief deeds, have redressed that – resulting in a relatively stable relationship and mutual understanding between the sector and HM Treasury.
“Exposing the regime to any further seismic shocks would damage trust between those parties, but the onus is on the Scottish Government to do more to engage with the oil and gas community – starting with the publication of its blueprint for independence next week.”
AGCC research and policy director James Bream added: “This study confirms the findings of a paper we published earlier this year stating that taxation was one of the big ticket items influencing the debate.
“There are 10 months until the referendum and, therefore, there is sufficient time for both sides of the discussion to make their case.
“All businesses, including those operating within the oil and gas sector, want to be presented with compelling narratives no matter the angle the narrator is coming from.
“More than half of the respondents to this latest survey still say that more information is required in order for them to form a view, and we will continue to press for answers from each campaign as we seek clarity on behalf of our members.”
Among other findings in the report, skill shortages are seen as the most pressing problem for the industry. Fast-rising costs for projects in the North Sea are also a major concern.
Nearly two-thirds of those polled (61%) support the creation of an oil fund to benefit future generations, although 35% reject the idea if it means higher taxes. One respondent said government – whether Edinburgh or London-based – should consider creating a state-owned oil operating company.
Another said the North Sea industry would get more recognition for its economic contribution under independence.
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