British, Scottish cabinets clash on vital oil industry

24th February 2014, Comments 0 comments

The British and Scottish governments held rival cabinet meetings in Scotland's oil capital on Monday to stake their claims for the industry's future -- a key battleground in the independence debate ahead of a referendum in September.

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 and gas sector.

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

Cameron flew by helicopter to an offshore oil rig to stress how the United Kingdom had the wherewithal to invest in North Sea exploitation.

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

Cameron visited British energy giant BP's ETAP platform some 217 kilometres (136 miles) off the coast.

"The broad shoulders of one of the top 10 economies in the world has really got behind this industry and will continue to stay behind this industry so we get the maximum benefit out of it for all of the UK, including Scotland," he said.

"We can afford the tax allowances, the investment, the long-term structure that is necessary to make sure we recover as much from the North Sea as possible."

"I profoundly believe the United Kingdom will be better off if we all stay together."

While they were both in the Aberdeen area, Salmond challenged Cameron to a head-to-head debate on independence.

"Let's get this referendum game on," the Scottish National Party leader told reporters.

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.

- 'Unprecedented challenges' for oil -

In a statement released on Monday, Cameron's Downing Street office 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.

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

It 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 statement.

While the UK could absorb such volatility, it equated to two thirds of Scotland's spending on education, it said.

It is thought there are 30 to 40 years of production remaining.

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

He wants to create a sovereign wealth fund from oil receipts in the way that Norway has.

He said the London government had profited from but misused North Sea revenues.

"The reason they want to hang on to Scotland's resources is that they've done so well out of them over the last 40 years. I think the next 40 years should be Scotland's turn," he told the BBC.

He added: "We've had 16 tax changes in the North Sea in 10 years, we've had 14 oil ministers in the last 17 years.

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

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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