Shell comments reveal Osborne's lasting damage

As a senior figure from Royal Dutch Shell again made clear that George Osborne’s tax raid on the oil & gas sector had damaged the company’s willingness to invest in the UK, the SNP has highlighted the Scottish Government’s commitment to a stable fiscal regime for the sector in an independent Scotland.

Asked about Scotland becoming independent in an interview in today’s Herald (Friday) Simon Henry, Chief Financial Officer of Royal Dutch Shell, said: “We try and stay out of such geopolitics in general and reiterate our wish and our need for investment is a long-term stable energy policy and fiscal framework. What we don’t need is arbitrary and unexpected changes in fiscal regimes. I can’t speak for Scotland, but the UK has a track record of exactly this, which has affected our own willingness to invest in the UK in the past.”

The article goes on to make clear that “recent concessions by the UK Government have not affected the company’s view”, underlining the long term damage done by George Osborne’s surprise tax raid on the sector in 2011. The long-term impact of tax instability was made clear in Oil and Gas UK’s 2013 Activity Survey which stated “the lack of new fields coming on-stream can be attributed to the damage done to investors' confidence by the numerous adverse tax changes in the early and mid-2000s”.

In the Scottish Government’s Oil & Gas Strategy published in July, the Scottish Government committed itself to a stable fiscal regime for the sector and to always work in consultation with the industry.

Commenting, SNP MSP Maureen Watt said:

“These remarks from Simon Henry are deeply telling and make crystal clear just how much damage the Westminster Government did with their shock tax raid on the sector in 2011.

“While George Osborne has since been forced into undoing some of the damage he inflicted on the sector, the reputational damage he did cannot be so easily undone.

“Companies operating in the oil & gas sector know that one of the greatest threats to their operations comes from the risk of nasty surprises from Westminster.

“A stable fiscal regime is essential to allowing companies to invest with confidence, which is why the SNP Government has committed itself to always work in consultation with the industry to deliver that vital stability.

“A Yes vote next year will deliver that stable system and ensure that oil & gas companies have the confidence they need to invest in an independent Scotland.”

Simon Henry’s comments can be viewed at http://www.heraldscotland.com/business/company-news/oil-giant-reaps-rewa...