Oil and Gas: UK Continental Shelf

Lord McFall of Alcluith Excerpts

Tuesday 9th February 2016 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, my noble friend is absolutely right about the strength of the United Kingdom and the resilience that it has afforded to the oil industry over a period of time. Long may that resilience continue.

[Lord McFall of Alcluith (Lab)]

My Lords, Scotland has its very own carbon crisis. The Minister mentioned a supplementary tax. That was imposed in the 2011 Budget and increased from 20% to 32% on the basis that oil prices had doubled. They have now crashed from $114 a barrel—happy days for the SNP—to less than $30 a barrel. There must be a compelling case for scrapping that supplementary tax in its entirety and engaging once again with Sir Ian Wood and others to ensure that, in a bleak global environment, there is at least some viable future for the North Sea oil industry.

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is right that the fall in oil prices is an international problem. He will be aware that there was fiscal reform in the 2015 Budget, with a £1.3 billion injection of extra help over five years through tax cuts. As I have said, the Chancellor will look at representations that have been made to him.