Budget 2016: Aberdeen and Grampian Chamber of Commerce adds to pressure on Osborne to cut taxes for the North Sea

 
Jessica Morris
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Oil prices have tumbled over 60 per cent since July 2014. (Source: Getty)

A group representing businesses in Aberdeen has thrown more weight behind calls on Chancellor George Osborne to deliver tax breaks to the North Sea in his Budget on Wednesday.

Aberdeen & Grampian Chamber of Commerce has written a letter to Osborne asking him to help the industry. It's struggling to weather the commodity rout which has sent oil prices tumbling over 60 per cent since July 2014.

"The downturn has had serious repercussions that extend beyond the oil and gas industry, towards all sectors in the wider economy of the region," the letter said.

"Stimulating investment in new oil and gas projects is vital to counteract these effects in the region."

The chamber called for a permanent reduction in the headline rate of tax, achieved by reducing the “supplementary charge” and “petroleum revenue tax” immediately by a minimum of 10 percentage points.

Read more: Algy Cluff warns Osborne must cut taxes in the North Sea

It also wants the government to make it easier for cash-strapped companies to access finance during the downturn.

The rout has forced oil companies in Aberdeen to cut costs, scale back and even abandon projects, and axe thousands of jobs. Industry body Oil & Gas UK and North Sea oil baron Algy Cluff have previously highlighted the industry's urgent predicament.

James Bream, research & policy director at the Chamber, said: “We are a frontier basin, we believe we have the world’s best supply chain and the government must ensure we have the world’s most competitive tax regime."

“Change may not have an immediate impact but will be a signal of support and demonstrate an effort to increase investor confidence."

“The alternative is to do nothing which will have an equal and opposite impact on that confidence.”

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