AS an industry veteran of some 30 years' plus experience in the North Sea the current crisis impacting the industry is on track to be the worst in its history ("Alexander: Crisis in North sea oil is deeply worrying", The Herald, December 19).

 

The oil price has collapsed before, but previous downturns in the 1980s and 1990s were at a time when the basin was much less mature, production was rising, installations were younger and unit cost of production was much lower. Today's problems are largely for the industry to address and the potential for ingenuity, adaptability and application of new technology should not be underestimated.

However, there is a very important role for government, particularly with regard to the tax regime. The recent announcements in theChancellor's Autumn Statement can only be described as somewhere between complacent and irresponsible.

The top rate of tax in the North Sea was reduced from, wait for it, 81 per cent to 80 per cent; this is little short of confiscatory. There is the possibility of tax cuts in the future but not yet, not defined and not before a year or so of consultation; so why invest today if there is the offer of a lower tax take in the future?

This can only accelerate the collapse in investment. The reason why the tax regime is higher in the North Sea than the rest of UK industry, which now only pays 20%, is to capture "excess profits". Patently at $60 a barrel hardly any profit is being made, let alone "excess" profit.

The Government needs to recognise the gravity of the crisis and reduce tax much further without delay. As a start the top rate of tax must be reduced to below 50 per cent; companies need to be allowed to retain a greater share of the diminishing cash that is being generated.

Failure to act will accelerate field closure and decommissioning, which will cost the nation a great deal more than the immediate tax reduction that is required. The Treasury mind-set needs to reboot to the $60 world. Iif the returns to investing in the North Sea are now below the returns available in the rest of the UK economy then the legacy of the egregious North Sea tax burden needs to be removed.

Raymond Hall,

The Firs,

Gartness Road,

Killearn,

Glasgow.

With new female faces on the front benches in Holyrood it was hoped that the proceedings would be more sensible than in the past. Kezia Dudgdale took her place as leader of the Labour group in parliament with a good deal of expectation that her questions to the First Minister would be of a much higher standard than those of her predecessors.

Her choice of subject for her first question, the collapse of the price of oil, dashed those hopes ("Black gold wose darken the festive cheer as Kezia makes her but", The Herald, December 19). She accused the First Minister of being unprepared for such an event, having failed to predict it.

Did she not realise that she has exposed the complete failure of her Labour colleagues to predict it? She also exposes the paucity of thinking in her own party. It was easy to criticise the efforts to assist the industry in Scotland but she made no suggestions for better efforts.

If, as I assume, her advisers suggested this question to her, then I fear for the revivification of the Labour Party in Scotland.

John Scott Roy,

42 Galloway Avenue,

Ayr.

YOU report on Kezia Dugdale attacking the Scottish Government for not doing enough to protect the North Sea Oil industry as global oil prices fall.

Interestingly , had Scotland voted for independence , which Ms Dugdale opposed , then the Scottish Government would have been in a stronger position to act . It could have abolished the 12 per cent extra tax imposed on the oil industry by George Osborne in 2011, which hit profits and stifled investment . The Labour Party , both in Westminster and in their Scottish branch office , have not given any indication that they would abolish this measure and so give the industry the help that Kezia Dugdale is pleading for.

James Mills,

29 Armour Square,

Johnstone