Oral Answers to Questions

Stuart Blair Donaldson Excerpts

Tuesday 1st March 2016 Commons Chamber

The Chancellor of the Exchequer was asked—

[Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)]

1. What fiscal steps he is taking to support the oil and gas industry.

[The Exchequer Secretary to the Treasury (Damian Hinds)]

This Government are clear that the broad shoulders of the United Kingdom are 100% behind our oil and gas industry and the thousands of families it supports. Last March, my right hon. Friend the Chancellor announced a wide-ranging fiscal package, including reducing the headline rates of tax and a new investment allowance, further expanded at the summer Budget to drive investment and support maximising economic recovery.

[Stuart Blair Donaldson]

Oil and Gas UK has highlighted that headline tax rates of 50%, or 67.5% for companies paying petroleum revenue tax, are no longer sustainable. As the UK continental shelf enters an new, ever more mature phase, and the oil price remains lower for longer, the fiscal burden needs to reflect these changing circumstances and to be permanently reduced. Will the Government listen to the industry, and what fiscal support will they bring forward for the oil and gas industry in this year’s Budget?

[Damian Hinds]

In the “Driving investment” paper, the Government absolutely recognise the need over time to change the fiscal structure. The scale of what my right hon. Friend did reflects the fact that the figure stood at £1.3 billion. The most recent of the headline tax reductions took effect on 1 January this year.