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First Minister sets out key areas of support and calls for action on tax to protect jobs.
Key areas of support for the oil and gas sector have been set out by the First Minister, following a special session of the Scottish Cabinet.
At the Cabinet meeting in Edinburgh, which was attended by Lena Wilson of Scottish Enterprise – the chair of the Energy Jobs Taskforce – the First Minister outlined that the Scottish Government would develop actions to help the industry in the following areas:
- Skills – ensuring that the sector retains its world-class workforce by supporting high-quality training and enabling redeployment and reskilling within the industry;
- Exploration – support to remove barriers to exploration and improve collaboration between industry and academia;
- Innovation – enabling the application of new and existing technology to improve production and processes and ensure that the North Sea can remain at the forefront of the global industry;
- Finance – address issues of access to finance that can hinder growth and international activity.
The Scottish Government will engage in discussion with the industry, the Oil & Gas Authority, enterprise agencies and local partners to deliver urgent action in each of these areas.
It was also confirmed that Ms Sturgeon has asked the Energy Jobs Taskforce – established in January 2015 and originally due to complete its activities this month – to continue its work to support individuals and companies in the sector.
The First Minister also made clear that fiscal policy is the main lever for incentivising investment, exploration and production in the North Sea. Tax policy is reserved to the UK Government and she confirmed that Finance Secretary John Swinney will seek an urgent meeting with the Chancellor to set out the Scottish Government's view that the tax burden on the industry must be lowered at the March Budget.
The First Minister said:
"The oil and gas industry is a huge success story for Scotland. It has fostered innovation, supported energy security and skilled employment, and generated significant economic value.
"There is no doubt the industry is currently facing an extremely challenging outlook, but oil and gas can continue to make a significant contribution to the Scottish economy and energy security for decades to come. However, this will only be achieved if we support the industry through this difficult period, encourage investment and ensure it remains well placed to benefit from a future upturn in oil prices.
"Cabinet today agreed to focus our efforts, along with those of the Energy Jobs Taskforce, on the key areas of skills, exploration, innovation, and access to finance.
"By encouraging exploration we will ensure future production levels can be maintained when the oil price inevitably rises and by supporting innovation and access to finance for internationalisation we will keep Scottish firms at the forefront of global oil and gas expertise.
"Meanwhile, we will work with industry to ensure it can recruit and retain the best people by maintaining the flow of talent into the industry and supporting re-skilling of staff to keep them in the sector.
"We will take forward urgent discussions with the sector on how the Scottish Government can provide additional help and support in these areas and make a clear contribution to ensuring the long term viability of the North Sea."
The First Minister continued:
"The Scottish Government is taking action to support the industry at this difficult time, but this needs to be matched by a commitment from the UK Government to address the fiscal regime in which the industry operates.
"Only the Chancellor can deliver the competitive tax regime that the sector requires at this moment and following our discussions today, we will continue to make the case to the UK Government for urgent action in the forthcoming Budget to lower the tax burden on the industry, a move that will help to protect jobs and investment."
Chief executive of Scottish Enterprise and chair of the Energy Jobs Taskforce, Dr Lena Wilson, said:
"The Energy Jobs Taskforce has made a significant contribution to help bring about the transformational change needed in Scotland's oil and gas industry. It is vital we continue to work together to do everything possible to support the industry during this challenging period and by focusing on the areas set out by the First Minister today, collectively, the industry and the public sector can safeguard the future of our world renowned oil and gas sector for decades to come."