Scotland politics

Scottish independence: Minister hints at North Sea tax cuts

Generic picture of oil platform Image copyright Thinkstock

North Sea oil and gas firms could benefit from new tax breaks if Scotland becomes independent, the country's energy minister has suggested.

Fergus Ewing told industry leaders in Aberdeen that the hunt for oil would move to other parts of the world if the North Sea tax regime was not changed.

He was speaking at a business breakfast which was also addressed by Better Together head Alistair Darling.

Mr Darling argued that leaving UK would create "additional risks".

The two politicians were speaking at an event hosted by industry body Oil and Gas UK.

Mr Ewing hinted at the prospect of tax breaks at the same time as accusing successive Westminster governments of having "squandered" cash from oil revenues over the years by failing to establish an oil fund.

He also hit back at claims that the sector had been successful because it had benefited from a "very stable tax and regulatory regime" under UK governments.

And he said the the SNP will not "disintegrate" if there is a "Yes" vote in the independence referendum later this month.

If the SNP was in power in an independent Scotland, Mr Ewing said, a standing committee would be set up with the North Sea industry to discuss tax changes prior to their introduction.

He said that "in order to maximise the economic recovery, future governments will require to play their part in considering what role tax changes are necessary to play in maximising economic recovery".


How much oil does Scotland have left?

Image copyright Thinkstock

As part of our Daily Question series, the BBC's James Cook has been examining the claims made by both sides in the referendum campaign about how much oil and gas is left - and what it might be worth to the Scottish economy.

Do you have a referendum question? Let us know by....

Emailing newsonlinescotland@bbc.co.uk.

We can also be found on Twitter @bbcscotlandnews

And on Facebook.


Mr Ewing said: "That is crystal clear because if not we will see activity carried out elsewhere in the world where oil and gas extractions are less expensive and arguably more profitable."

He claimed it was a "scandal" that UK governments had failed to establish an oil fund, saying they had instead treated the sector as a "great big cash machine".

But he said in an independent Scotland "I expect we can build up an oil fund and use the benefits from that as an asset to help create the Scotland we would all want to see, a fairer and more prosperous society".

In response to a question from the audience, Mr Ewing also gave a guarantee that the SNP, led by First Minister Alex Salmond, would continue and "steer" a newly-independent Scotland to "the success we believe we can achieve", if the party was elected after independence.

Mr Darling, however, argued that voting to leave the UK would create additional risks in an already uncertain world.

He said: "Within a world where inevitably there are risks and uncertainties we shouldn't add to those by taking on additional risks, which I believe would be very damaging for the Scottish economy and for our prospects for the future."

While he said North Sea oil had been "a massive boost to this country for 40 years now", he added: "One of the reasons it has done well is we have had a very stable tax and regulatory regime, the North Sea oil basin, which has allowed firms to look ahead for the future."

If Scotland left the UK he said it would be "very, very dependent" upon oil revenues to fund public spending, but warned that any drop in the amount of cash raised could impact on services north of the border.

Mr Darling asked: "How do we pay for our NHS, how do we pay for pensions in the future, where do we generate the money from?

"There are times it would come from North Sea oil, but there would be an awful lot of times when it wouldn't.

"Last year alone the North Sea oil revenues fell by about £4.5bn in one year - that's more than we spend on schools, it's getting on for half of what we spend on the NHS in Scotland."

Mr Darling said the amount of oil which comes from the North Sea, and how much of it there was in the future, was "absolutely critical" to Scotland's success.

He added: "To rely so much on a revenue that is notoriously volatile, and where production has never quite lived up to what successive governments said it was going to amount to, that is presenting a massive risk to Scotland.

"The risk isn't just in fiscal terms, it translates into what you can spend on things most of us one way or another depend upon, in relation to health and so on."

Related Topics