TAX breaks for North Sea oilfields could see subsidies “go back to Singapore,” union reps warned yesterday in a call for targeted state intervention.
Speaking before a major oil summit in Aberdeen today, Scottish First Minister Nicola Sturgeon called for “urgent action on taxation to give the industry the certainty and security it needs to protect jobs and investment.
“It is essential that the tax reductions are sufficient to instil investor confidence, as without that maximised recovery will not be achieved.
“This is because the extra investment needed for smaller fields, ageing infrastructure as well as much more exploration and appraisal is only going to be made by operators with substantial tax reductions.”
Tory Chancellor George Osborne announced a small tax cut in the Autumn Statement, and has hinted there may be a further pre-election boon for the oil and gas sector.
But Aberdeen-based Unite official John Taylor said the industry needed “targeted money, not just chucking money.”
He said: “I have concerns about tax breaks, the money could go back to the oil companies in Singapore or somewhere else.
“The future of the industry is in drilling, so we need the government to target money into drilling.”
The government should also channel funding towards platform maintenance, he said.
“Unless something is done soon to stem the flow of job losses, key skills will be lost.
“Our worst fear is that these cuts could create the potential for another health and safety disaster on the scale of Piper Alpha.”
RMT organiser Jake Molloy reiterated the call for targeted investment, saying his union — which has not been invited to the Aberdeen Council conference — had been making the case for intervention since December.
Ms Sturgeon and Scottish Secretary Alistair Carmichael will join industry bosses and unions at tomorrow’s summit to discuss the crisis in Britain’s offshore industry.
Over 1,000 jobs have been shed from the industry amid a sharp fall in oil prices.
Aberdeen Council leader Jenny Laing said: “The city council called the summit because many thousands of jobs in Aberdeen, the rest of Scotland and in the UK rely upon continued confidence in the North Sea industry.”