Osborne must take action to secure UK oil industry

George Osborne must take urgent action to secure the future of the North Sea oil industry, Ed Balls has said. Writing in the Press and Journal ahead of a visit to Aberdeen with Scottish Labour leader Jim Murphy and Scottish Labour MPs Cathy Jamieson and Tom Greatrex, the Shadow Chancellor said the time for action is now.

The full text of Ed Balls' article is below:

"The North Sea oil industry is one of Scotland's great success stories.

For decades it has sustained thousands of jobs, generated billions in tax revenue and acted as a platform for exporting the talent and expertise of this great nation around the world.

But the industry is at a cross-roads. The plummeting global oil price has given some respite to motorists and has been good for the UK economy overall, but there is no doubt that it has also had a negative impact here in the North East of Scotland.

Hundreds of jobs have already been lost, with thousands more at risk. This is a worrying time for oil workers and their families. Everybody who can take action should do so. Walking by on the other side isn't the response of a government in control.

When Scottish Labour leader Jim Murphy was in Aberdeen a couple of weeks ago he set out Scottish Labour's plan for a resilience fund to support critical industries in times of difficulty. The oil industry is vital to the Scottish economy and nobody can doubt it needs support. There's nothing to stop the SNP Government in Edinburgh setting this up now. There's no time to waste.

There is also a big role for the UK Government to play and that's why I will be joining Jim Murphy in Aberdeen today to meet with workers and industry bosses.

George Osborne, the Conservative Chancellor, has responsibility for setting the tax rates for the North Sea. He's already caused huge uncertainty with botched tax changes in his 2011 Budget. And while he's promised to look at this issue again, the events of the last few weeks mean we cannot afford any more delay.

We need to see urgent action to improve the tax incentives for North Sea oil investment. And if George Osborne fails to act then I am clear that, after the general election in May, a UK Labour government will. Because failing to act will not only risk jobs and investment now, it will also cost the UK taxpayer in the long-term as we lose revenue from oil that gets left in the ground.

This is all about what's best for maximising the potential of one of the country's key industries. But postponing this until the Budget in two months’ time is too late. The time for action is now."

SNP Energy Minister Fergus Ewing said in response to Ed Balls article saying that the Labour party must clearly back proposals for a reduction in tax on the oil and gas industry to ensure a vibrant future for the North Sea. The proposals to reduce the supplementary charge immediately and to introduce an exploration tax credit have been put forward by the Scottish Government and supported by the industry, including Sir Ian Wood.

Commenting Mr Ewing said: "Every day without action from the UK Government risks further damage to the oil and gas industry. Businesses and oil workers in the North Sea do not need to wait for another review they need action now. Labour must give their full support to the immediate reduction in the supplementary charge and support an exploration tax credit that would secure a strong future for the North Sea. The Scottish Government has set out clear proposals that would support the industry and industry experts like Sir Ian Wood have endorsed our approach.

"So far Labour have only shown interest in talking the industry down and playing party political games. The Oil and gas industry has had enough of warm words - what is needed is action and action now. Instead of sitting back and doing nothing Labour must endorse the immediate action that the industry and the Scottish Government have been calling for." Fergus Ewing added.