The UK Chancellor of the Exchequer Philip Hammond on Wednesday presented his first and last Autumn Statement reaffirming the government’s commitments to UK’s oil and gas sector without adding any new significant commitments.
Namely, the Chancellor said in his speech on Wednesday: “We will deliver the commitments we have made to the oil and gas sector.”
Following the Chancellor’s statement, the Scottish National Party (SNP) said the party has consistently called for further action to support Scotland’s oil and gas sector.
“Action is required to support increased production in sites nearing decommissioning, to help the sector attract capital investment and to support exploration. The Chancellor has chosen to take no further action to support the industry,” the party stated.
Responding to the Chancellor’s Autumn Statement on Wednesday, Deirdre Michie, chief executive at Oil & Gas UK, a representative body for the UK’s oil and gas industry, said: “We are pleased to hear the Chancellor re-commit to HM Treasury’s Driving Investment plan today. This sends a strong signal to investors that the government recognizes that the UK oil and gas tax regime needs to be predictable and internationally competitive.
“Today’s Treasury forecasts show our industry will be contributing £10 billion more in production taxes over the next five years than was previously expected. While this can be attributed in part to changes in commodity prices and exchange rates it also reflects the significant work of industry to make our operations more efficient and to increase production.
“The sector is still in urgent need of fresh investment…”
“Our industry can make a vital contribution in delivering the Chancellor’s ambitions for the economy and the government’s industrial strategy. We are developers of cutting edge technology, providing highly skilled jobs, helping power to the nation and exporting to the world.
“We will continue to work with Treasury on the important issue of decommissioning tax relief, key to stimulating investment and activity for the supply chain which we hope to see resolved by the 2017 Budget.
“The sector is still in urgent need of fresh investment and we need government to keep working with us to ensure a competitive business environment.”
First & last
Regarding the annual Autumn Statement, the Chancellor’s first statement will also be his last as he has decided to abolish it.
Hammond said: “This is my first Autumn Statement as Chancellor. After careful consideration, and detailed discussion with the Prime Minister, I have decided that it will also be my last. Mr Speaker I am abolishing the Autumn Statement. No other major economy makes hundreds of tax changes twice a year, and neither should we.
“So the spring Budget in a few months will be the final spring Budget. Starting in autumn 2017, Britain will have an autumn Budget, announcing tax changes well in advance of the start of the tax year.”
Offshore Energy Today Staff