Westminster is treating the North Sea as a cash cow, says SNP minister

Posted on 12 Jan 2012

The Manufacturer speaks with Maureen Watt, MSP for Aberdeen South and North Kincardine, the centre of the UK’s oil and gas industry, to discuss the tax rises slapped on the industry.

TM: How has the supplementary corporation tax impacted upon your constituency?

MW: There was real anger on the doorstep over what the government had done. Oil and gas companies had thought that they had a very open and trustworthy relationship, so it completely knocked their confidence in Westminster government and in their dealings with them.

The SNP and Alex Salmond has said that we need to have a relationship with the industry based on trust. We’ve said in discussions with the industry that there would be a twelve month lead in time to any tax changes that affect the industry.

TM: Oil and Gas UK said that North Sea investment came in below industry forecasts, is this because of the tax hike?

MW: “They are correct. A lot of investment was so far down the line that contracts had already been signed. Whether that level of investment will be sustained in future years remains to be seen. If it isn’t, it is because of the tax hike.  We have already seen companies say that they are not going to go ahead with investment.

TM: What changes would the SNP make if independence was gained?

MW: What the industry wants most is stability from the regime that they are working under. [An independent Scotland] would mean that industry and government can get together quickly, something that doesn’t happen with the Westminster government.

TM: Would you say that London is less interested in industry than Scotland?

MW: I think the last tax hike showed that Westminster government, made up of David Cameron, George Osborne and Danny Alexander, doesn’t understand how the industry works and regards it as a cash cow, rather than a special source of revenue that needs to be handled with long-term interests. That’s why the SNP is very keen to set up an oil fund.

SNP MSP, Maureen Watt
SNP MSP, Maureen Watt

TM: Would the taxes from North Sea oil go to Scotland if independence was gained?

MW: The oil and gas revenue taken from the North Sea has gone to Westminster coffers and Scotland hasn’t seen any benefit from it. There is the same amount of oil to come out over the next 40 years and we believe that Scotland should see the benefit of that.

Management of the licensing regime for the North Sea has not been handled to the benefit of the whole of the UK. If you were managing it as Norway has done, it would be long-term and not for a quick buck.

TM: Why is David Cameron fighting so hard to keep the union, how is the union good for England and bad for Scotland?

MW: The union has been good for the Westminster government because of the resources. In terms of legislation, it has always been London-centric, which has been bad for Scotland.

TM: Autumn 2014 is the SNP’s ideal date for the referendum, is this to coincide with the 700th Battle of Bannockburn?

MW: No, it is a big decision for the people of Scotland so time is needed for all the arguments to be put. Right now there is a concentration on the economy and trying to get it back on track with the limited powers we have.

TM: How are the SNP looking to support industry?

MW: The Scottish government increased the amount of capital spend to mitigate for the downturn in the construction industry, which has been welcomed by manufacturers.

We are pushing the use of green energy and now a number of green energy companies are relocating and investing in Scotland. Alex Salmond wants to make manufacturing the centre of the Scottish economy.

The [Westminster] government have talked down oil and gas in the North Sea, because they didn’t want people in Scotland to think that they had the ability to become independent. Because of that people didn’t have the confidence to go into the oil and gas industry but people are now seeing that it is a bright future, and something that young people want to go into.