The energy sector will be a key part of the independence debate in Scotland and cannot be ignored.
That’s according to EY partner Colin Pearson an expert in the Oil and Gas industry and part of the team behind the Grasping the Thistle report, looking into the issues around Scotland’s economy.
Mr Pearson told ELN: “For an independent Scotland 12% of the economy would be driven by the oil and gas sector, which is a significant proportion. It’s one of the key constituent industries that will shape the debate and shape the future of Scotland.
“A large part of the SNP’s report (White Paper on Independence) was dealing with a broad range of political issues that need to be covered – currency, defence spending, social services. The mere fact that energy was a whole chapter in itself, testifies to the importance of that to Scotland’s future.”
Part of the reason for the importance is the recent rise in North Sea exploration.
“There’s actually record levels of investment at the moment. The actual capital spend in the North Sea is just phenomenal, so we are in a boom time,” added Mr Pearson.
But that very boom, could lead to extra taxation falling upon the sector.
In the Grasping the Thistle report published this week EY speculates that the majority of Scotland’s oil and gas companies are unconvinced by promises on taxation should the nation vote for independence next year with the majority expecting increases on tax and regulation in the event of independence.
More than three quarters (79%) of the near 140 industry leaders and decision makers polled as part of the paper, which has been produced in association with Aberdeen & Grampian Chamber of Commerce, anticipate a hike in the tax take from the UK Continental Shelf (UKCS) in the event of a ‘yes’ vote.
Mr Pearson concluded: “Our survey shows if there’s a ‘yes’ 79% expected an increase in the tax burden. In the event of a ‘no’ vote, 80% expected no change. So it was a mirror image, which is really interesting. Particularly in the light that the Scottish Government in their White Paper are absolutely insistant that they’re not going to change oil and gas tax.
“There is a gap between what’s being said (by the SNP) and the industry. I can’t see it being business as usual except in the event of a ‘no’ vote. It’s something the Scottish Government will have to address.”