Killing the goose that lays the golden egg

Perhaps the UK Government’s Cabinet were not around when Aesop’s Fables were discussed in their respective schools. Certainly, they don’t seem to know the moral in the fable about killing the goose that lays the golden egg.

Just when the North Sea oil and gas industry was gaining the new lease of life it needed to sustain itself for decades to come, along comes the Chancellor, desperate to appease the growing outrage about fuel prices.

Reputedly this is when Danny Alexander came up with a wizard wheeze. By mounting a tax raid on the North Sea operators, George Osborne would be able to amaze the electorate by taking 1p of the price of a litre of fuel.

Although he was on record as criticising Labour governments for using the North Sea as a ‘cash cow’, Osborne proved himself capable of quite blatant hypocrisy by mounting a £2 billion raid on the North Sea operators! The reduction in fuel prices would be paid for by a tax on the North Sea operators.

Almost immediately investment by the industry that is Britain’s biggest industrial investor, hit the buffers. Statoil put an immediate hold on £10 billion plans to develop the Mariner and Bressay fields. Other operators started re-appraising their plans and the shock waves have now percolated through the supply chain, putting contracts on hold.

Oil platform

What seems incredible is the apparent lack of consultation.

It’s as if, yet again, the oil and gas industry – predominantly based in the Aberdeen area – was ‘out of sight and out of mind’ when viewed from the ivory towers in Whitehall.

It shouldn’t be.

The North Sea oil and gas industry has underpinned the UK economy for 40 years. As Andrew Marr says, without oil Margaret Thatcher’s economic reforms would have been doomed to failure.

Today, the offshore oil and gas industry accounts for a third of all industrial investment in the UK. It supports 400,000 jobs throughout the UK and provides 60% of our total energy needs.

You would think that would be difficult to ignore in the corridors of power in Westminster. But, many of our Westminster politicians are apparently inordinately myopic.

In the next few days we can expect to hear just how much damage the Chancellor’s tax raid has inflicted on the Britain’s ‘Golden Goose’.

Margaret Thatcher was famously ‘not for turning’. Let’s hope George Osborne and Danny Alexander are. For the future of thousands of jobs, billions of pounds of investment and for our future energy supply security and the country’s balance of payments, we need a U-turn (however the politicians want to dress it up to save face).
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