MP: Lower oil taxes help investment

Published: Friday 19th December 2014 by The News Editor

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The Treasury must accept significantly lower taxes from the North Sea in future to create jobs and boost investment, Chief Secretary to the Treasury Danny Alexander has said.

The Highland MP described industry warnings that plummeting oil prices below 60 US dollars (£38) a barrel could render some North Sea projects unprofitable as “a big concern”.

“This is an industry that is used to dealing with very volatile prices, but clearly this is very concerning,” he told BBC Radio Scotland’s Good Morning Scotland programme.

“At the moment prices under 60 dollars a barrel is something that will affect quite a lot of projects in the North Sea.”

He said the Government must keep improving regulation of the North Sea, drive down taxes and continue with support measures such as decommissioning, investment and exploration allowances.

The industry also has a responsibility to reduce costs and maximise the efficiency of existing production, he added.

“Obviously we have started to reduce the headline rate of tax, and that is now in a downward path over the next few years,” he said.

“We have to accept that there is going to be significantly less tax from North Sea oil and gas because that is necessary to get the investment, to continue to create the jobs and support what is one of the most important employers, not just in Scotland but across the whole of the UK.

“It is very important to send a message to investors around the world that the North Sea is open for business, that it is a great place to invest, that there are huge opportunities in the UK continental shelf still.”

Published: Friday 19th December 2014 by The News Editor

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