SNP claim that ‘Tories can’t be trusted on oil’ as referendum battle intensifies

Posted on 11 Jan 2012

Alex Salmond said that the referendum is “potentially the biggest decision we have made as a nation for 300 years,” as he toured an oil facility in Dyce, eastern Scotland.

Oil is a fervent battleground for the Scottish First Minister, providing the economic grounding for Scotland to demand full economic and political independence.

As the country’s biggest asset, many people want more control over what happens to the oil that lies below the North Sea.

SNP Minister for the Scottish Parliament (MSP) Mark McDonald has said that Westminster cannot be trusted with Scotland’s oil and the jobs and economic benefits it brings.

The MSP for North East Scotland pointed to secret files that have only just released under the 30 year rule, detailing how Margaret Thatcher defied pleas from senior cabinet colleagues when she vetoed plans for a multibillion-pound North Sea gas pipeline that could have created up to 15,000 jobs in the north of Scotland.

Mr McDonald commented: “These papers underline how Scotland’s oil and gas industry is far too important to Scotland to be left in the hands of the UK government.”

He continued to say that successive Westminster governments have not understood the industry, squandering opportunities for Scottish jobs and investment.

“George Osborne doesn’t understand the industry’s concerns about his tax raid and its negative impact,” he said. “The SNP is working hard to attract investment in North Sea Oil but Westminster’s historic bumbling risks some fields being left underdeveloped. After 40 years of inept management by the UK Government, it is time Scotland was given a chance to control these natural resources.”

A spokesperson for the trade organisation Oil and Gas UK was not committal in its response to the referendum, but was critical of the recent taxes increases for the industry.

Despite record energy investment in the North Sea during 2011, the research group Wood Mackenzie reporting a figure of around £7.5bn – the highest in the 30 years, but industry organisation UK Oil and Gas had forecast £8bn.

The organisation commented: “It is not as high as it could be because a significant group of projects are not commercial following the tax increase last year.”

The supplementary charge on corporation tax was recently subject to a 12% rise, increasing from 20 to 32%. This took the total tax rate to 62-81% overall, depending on the age of the field.

Maureen Watt, MSP for Aberdeen South and North Kincardine, which is home to large oil and gas firms Wood Group and Aker Solutions, said that the tax has had a huge impact in her constituency.

Ms Watt told The Manufacturer: “There was real anger on the doorstep over what Westminster had done to the oil and gas industry. It completely knocked the industry’s confidence in Westminster government and in their dealings with them.”

Describing the SNP and Alex Salmond’s attitude towards industry, Watt said “you need to have a relationship with industry that is based on trust, [we support] a 12 month lead-in time to any tax changes that affect the industry.”

Currently, there is no dividing line between the waters of Scotland and England, but North Sea makes up a large part of the UK’s £11bn in tax revenues generated by oil and gas companies during 2011.

Click here to read The Manufacturer’s full interview with Maureen Watt, MSP for Aberdeen South and North Kincardine.