Funny how Chancellor and PM find the way to Aberdeen when they need oil

Isn't it funny how the Prime Minister and Chancellor suddenly remember the importance of Aberdeen as the centre of the UK oil and gas industry when they need a favour?

Where were they when the industry was calling for help to extend the life of the North Sea? Where were they when the industry was pleading for an equitable tax regime? Where were they when we were pleading for investment in our infrastructure to support the industry?

Conspicuous by their abesence, that's where! Another element in the conspiracy to "whitewash the North Sea oil indstry out of modern British history" as Andrew Marr put it in his History of Modern Britain.

It seems more and more clear that governments in Westminster have tried desperately to play down the significance of North Sea oil to the UK economy. As Andrew Marr said, Thatcher's ecomomic plans would have failed and, thanks to the Freedom of Information Act, we now have the text of a memo to government from 1974:

"Britain is now counting so heavily on North Sea oil to redress its balance of payments that it is easy to imagine England in dire straits without it," wrote economist Gavin McCrone. "For the first time since the Act of Union was passed, it can now be credibly argued that Scotland's economic advantage lies in its repeal."



Back to the present and the summit in Aberdeen.

In need of a lifeline from the industry they have hampered in the past, the Prime Minister and Chancellor visited to seek the help of the North Sea operators in opening the taps a bit, to reduce the oil price. So the message presumably was something like: "Sorry for ignoring your pleas for help in the past, but could you now pump more, to the detriment of your revenues, to help us out of a hole?".

The Prime Minister is reported as saying that the price of oil that is crippling business and putting an unbearable squeeze on rural residents who rely on oil for heating, is not the fault of the tax regime.

That is a bit hard to swallow. Tax is two thirds of the price of fuel, which is among the highest taxed in the entire world. On top of that the Exchequer will benefit by £4 billion from the current high prices.

So, to say that tax is not implicated in the current price hike seems simplistic at the least.

Now more than ever, we want to extend the UK's supply of oil and gas for as long as possible. That means examining the fiscal regime as it affects our oil and gas companies.

It also means reversing the chronic under-investment in the community (Aberdeen) that has supported the UK economy over the past 40 years.


The Prime Minister and the Chancellor need to commit to promoting Aberdeen City and Shire as Europe's Energy Capital and reversing past under-investment to ensure this is a competitive place that will sustain energy developments for our future.


FOOTNOTE: Was it just me that noticed the national media seemed reluctant to admit that the PM and the Chancellor met the industry in Aberdeen. There really does seem to be a desperation to downplay Aberdeen's role in helping to keep UK plc afloat for the past 40 years! Not just in government, but even in the media.
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