North Sea oil industry to suffer £500m loss despite recovery
SCOTLAND'S North Sea oil industry will still make a £500 million loss for the taxpayer despite a partial recovery in prices and fall in the pound.
Historically, the North Sea oil industry has provided massive economic benefits for the UK
The impartial Office of Budget Responsibility halved the expected £1billion cost to the Treasury for 2016/17.
Historically, the industry has provided massive economic benefits for the UK, raising as much as £11billion as recently as 2011/12, helping to pay for public services and keep taxes low.But a drop in oil prices in 2015 saw revenues plummet and led to thousands of job losses.
The OBR revised upwards its estimates for every year after 2016/17, with a £2.5 billion rise for 2020/21 compared to its March forecast.
Its report predicted that prices will average £44 per barrel this year, predicted oil prices would average about $54 a barrel next year, rising to $60 by 2021.
Chancellor Philip Hammond yesterday offered no further support for the industry.
Instead he used his Autumn Statement to "recommit" to the current tax regime, which includes zero-rating petroleum revenue tax (PRT).
Chancellor Philip Hammond yesterday offered no further support for the industry
The oil industry helps to pay for public services and keep taxes low
He said the move was needed to provide a "stable tax regime", and it was welcomed by the trade body Oil and Gas UK.
Chief Executive Deirdre Michie said: "This sends a strong signal to investors that the Government recognises that the UK oil and gas tax regime needs to be predictable and internationally competitive."
Callum McCaig accused the UK Government of using the industry as a 'cash cow'
But Callum McCaig, the SNP's energy spokesman at Westminster accused the UK Government of using the industry as a "cash cow".
Ahead of the 2014 independence referendum, the SNP forecast that revenues would be more than £20billion from 2016/17 to 2018/19, which would be the first three years of independence.