British, Scottish cabinets clash on key oil industry

24th February 2014, Comments 0 comments

The British and Scottish governments were to hold cabinet meetings in Scotland's oil capital on Monday to present rival visions for the crucial industry's future after September's independence referendum.

British Prime Minister David Cameron took his ministers from London to Aberdeen on Scotland's northeast coast, to announce investment plans for the North Sea oil sector.

The fate of North Sea oil revenues is a major battleground ahead of the September 18 referendum on whether Scotland should end its 300-year-old political union with England.

Scottish First Minister Alex Salmond took his pro-independence regional government from Edinburgh to Portlethen, just south of Aberdeen, to bang the drum for keeping North Sea oil revenues within Scotland alone.

He challenged Cameron to accept a head-to-head debate on independence.

"Since we are both in the same place roughly at the same time, then why don't we have a debate?" he told reporters.

"I am willing, I hope he is willing as well, so let's get the debate and let's get this referendum game on."

Salmond wants to turn the debate into a London versus Edinburgh battle -- but Cameron says it is an argument to be had between the for and against campaigns within Scotland.

Cameron's Conservatives, their Liberal Democrat junior partners in the British government and the Labour opposition are all campaigning to keep the United Kingdom intact.

It is only the third time that the British cabinet has ever sat in Scotland, as Cameron strives to convince voters of the economic case to stay in the union.

In a statement released on Monday, the prime minister revealed new measures for the oil sector.

They include plans for the industry and government to work closer to share infrastructure and geophysical information and to ensure that licences are awarded with a view to extracting the maximum amount of oil.

- 'Unprecedented challenges' for oil -

His Downing Street office said the measures would increase Britain's energy security and reduce reliance on imported oil and gas, which was pushing up domestic fuel bills.

Cameron argued: "For many years the UK has supported the North Sea oil and gas industry and we have worked together to make this an economic success the whole country can be proud of.

"We will continue to use the UK's broad shoulders to invest in this vital industry so we can attract businesses, create jobs, develop new skills in our young people and ensure we can compete in the global race."

London warned that the UK Continental Shelf, source of the country's oil, faces "unprecedented challenges" that could only be met by Britain as a whole.

"Tax revenues from oil and gas in 2012-13 were £4.7 billion ($7.8 billion, 5.7 billion euros) lower than the year before -- a drop of more than 40 percent," said the Downing Street statement.

"While the UK's broad and diverse economy is able to absorb this volatility, this equates to more than one third of Scotland's health budget or two thirds of Scotland's spending on education."

Salmond insisted control of North Sea resources would be better handled by an independent Scotland.

"We've had 16 tax changes in the North Sea in 10 years, we've had 14 oil ministers in the last 17 years," he told BBC radio.

"One thing that Scottish control of oil and gas resources will offer is a much more stable, long-term policy."

He wants to create a sovereign wealth fund from oil receipts, telling Cameron to look across the North Sea to Norway, which has successfully stored up its oil wealth.

Opinion polls have consistently shown a majority of Scots preferring to stay in the UK, although the gap with those who want independence has narrowed.

An ICM poll of 1,004 Scottish adults for the Scotland on Sunday newspaper, conducted throughout last week, found some 37 percent would vote for independence while 49 percent said No.


© 2014 AFP

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