Dugdale Faces Sturgeon At FMQs
18 December 2014, 14:00
Labour's new deputy leader Kezia Dugdale has urged the First Minister to provide assurances to hundreds of thousands of oil workers this Christmas, by providing greater support to the "crisis-hit'' industry.
The oil and gas sector is facing job losses, wage cuts and expert warnings that it is ''close to collapse'' amid falling crude oil prices.
Taking part in First Minister's Questions at Holyrood for the first time since being appointed as deputy, Ms Dugdale said the Government had failed to see the crisis coming.
Nicola Sturgeon, she said, was "unprepared'', and must take steps to safeguard jobs.
The First Minister said the Scottish Government was already working with the industry, and called on Holyrood's parties to unite around a plea to the UK Government to ease the tax burden on the sector, and support innovation.
Ms Dugdale said: "Of course the UK Government should respond, and quickly, but the Scottish Government has to work with unions and the industry to maintain employment levels right now.
"What assurances can the First Minister give oil workers and their families that their jobs - what security do they have this Christmas from this Government?''
She said the oil industry's training academy is "desperate'' for Government support to invest in skills to make sure that if the oil price rises again, people will be available to work in the sector.
"Isn't it the truth that the Scottish Government just didn't see this crisis coming, because they believed their own wishful thinking about oil prices,'' she continued.
"Surely we cannot have a First Minister so unprepared, so unsighted on such a key industry.
"Will she initiate an inquiry into why her Government was so wrong in the past, so that we can get it right in the future?
"First Minister, there are tens of thousands of jobs at stake, you need to be able to tell the Scottish public why you got it so wrong in the past, so that you can get it right in the future.''
Ms Sturgeon said her Government had to set up the Energy Skills Academy "at least two years ago'' to support skills development.
The SNP administration continues to support innovation, while Energy Minister Fergus Ewing is in constant contact with industry body Oil and Gas UK and other companies in the sector, she said.
"The sector, the industry wants us to unite to call on the UK Government to accelerate action around the new investment allowance, they want us to unite to call on the UK Government to increase support for innovation, and I think we should call on the UK Government to take more action around reducing the supplementary charge,'' Ms Sturgeon said.
"Let us come together to call for the sensible action that those in the industry want.
"I think that those whose jobs are under threat right now look at us and want to see us coming together in that way, not having a party political ding-dong.''
Ms Sturgeon said the Government had invested millions in the Oil and Gas Innovation Centre, and in supporting skills and modern apprenticeships.
She said it supports the industry in calling on UK ministers to take "bolder action on reducing the supplementary charge, urgent action on the proposed new investment allowance'', and support for exploration.
Danny Alexander, the Chief Secretary to the Treasury, said earlier this month that UK ministers would consult on several new approaches to taxation.
The plans include an investment allowance covering the whole of the UK Continental Shelf to reduce the effective tax rate for investing companies.
The UK Government also plans to decrease the rate of the supplementary charge payable on profits from oil and gas production in the UK and UK Continental Shelf from 32% to 30%.
Ms Dugdale said the First Minister would receive support when she goes to the UK Government with her calls.
"But she must be reminded of the fact that she has at least six responsibilities to the oil and gas industry here in Scotland.
"She mentioned skills and innovation, but she also has responsibility for onshore business taxes, support for finding markets, supporting infrastructure and indeed diversifying the industry.
"So the same old answers about looking to Westminster for solutions just do not stack up.''
Robin Allan, chairman of the independent explorers' association Brindex, has spoken of a "huge crisis'', as he said the industry was ''close to collapse''.
Oil veteran Sir Ian Wood last week predicted job losses in the North Sea over the next 18 months as the company he founded, the Wood Group, announced a pay freeze and a cut in contractor rates.
Economist Ronald MacDonald has said that oil prices could fall further below 60 US dollars (£38) a barrel to 40 US dollars (£25.60).
Scottish Government statistics predicted an oil price of over 110 US dollars (£70.40) a barrel, while Deputy First Minister and Finance Secretary John Swinney has suggested prices could return to this level next year.
Mr MacDonald's suggestion of further price falls would be "catastrophic'' for the industry, Ms Dugdale said.
"Has the Scottish Government done an assessment of the long-term impact of a falling oil price, and will they publish it?'' she asked.
Ms Sturgeon said: "We will continue to work with the industry doing the work that is required to support them.
"There is not a week that goes by probably that Fergus Ewing is not meeting with companies active in the North Sea oil and gas sector.''
Ms Sturgeon said the Scottish Government maintains a good relationship with Oil and Gas UK, and she will meet with its chief executive Malcolm Webb in January.
"In the interests of the consensus approach that I am genuinely keen to build, if there are specific proposals that any other party wants to bring forward then do so, but make them specific so that we can give them the serious consideration that we would want to,'' she added.