yn parlau'r strategaeth yw filter rhai dyworldiad prevention tech. Nid oes dess y cyfrain yn mas organisations gan bpr bins���, holdiwch bwysignydd we다면 hefyd, Cymru o 1, 2, 5, 8, 7, against John Swinney per saffEEs, bydd o fynd i pri bugs queue i fyllael mag ul draun chyf solidarity i meltedr, am gallwech chi'n deil��요 viddid vangarl When the announcement of charging against John Swinney is the best way to buy the Prime Minister. Mae'r ddych yn gweithio pwysig'r cyffrei jyler Rydym yn cymddeitio, minister? Can you speak to, remove the most in the name of John Swinney? Minister of 14 Minutes. Thank you. We have recently marked 50 years of the North Sea oil and gas industry, an industry that has made an enormous contribution to the Scottish and the UK economy. In production taxes alone, the sector has paid an excessive £300,000 million to UK Exchequer in today's prices. However, the on-and-gas sector's contribution is far more than simply production tax revenues. It's the supply chain with 2,000 companies in Scotland. It's an export market with international sales reaching £10,000 million a year. It's the 225,000 skilled jobs and people who make a significant contribution to the Scottish economy. It's Aberdeen and Aberdeen Shire, a globally renowned hub of engineering expertise. When the independent expert commission on on gas published its report entitled, maximising the total value added last July, it made clear that the industry stood at a critical crossroads and that urgent action was needed. The message was compounded by the snapshot of the sector presented in oil and gas UK's activity report for 2015, which was published just last month. With just one week until the UK Government's budget, I want to reiterate the Scottish Government's call for a transparent, predictable and competitive fiscal regime. I know that this call has been echoed across the chamber with even Ruth Davidson publicly calling on the chancellor to reduce the tax burden on industry in the press general in 27 February. For too long, the UK Government has used the North Sea as a cash cow, picking short-term tax grabs against and instead of a considered and collaborative approach. No one other than the Conservatives doubt that truth, most certainly not in Aberdeen. We have experts such as Professor Alex Russell who made it clear last week that the UK Government has been very slow. They are trying to time it just prior to a general election. They are playing politics with the future of the North Sea oil industry, Professor Alex Russell. That is not good enough. Lower oil prices have exacerbated the challenges facing the industry and increased the urgency for fiscal reform. Low oil prices are not new, the industry has been here before and there is little doubt that the price will go up again. However, that alone will not secure the long-term future for the industry. The only gas UK activity survey provides a snapshot of industry activity. I will outline a few of the fact from this year's survey. First, the cost of operating the UK-CS has been rising steadily. Cost rose to a record £9.6 billion in 2014, a rise of almost 8 per cent on the previous year. That comes on top of increases of 10 per cent and 15.5 per cent over the previous two years. Second, although there have been significant capital investment in recent years, the level of investment is set to fall and could potentially drop from £14.8 billion in 2014 to as low as £9.5 billion this year, a 35 per cent fall in investment. Third, the survey also concluded that the North Sea faced the lowest rate of exploration drilling since 1965. With just 14 exploration wells drilled in 2014, the number of 14 is likely to drop into single figures in 2015. The industry recognises the challenge of rising costs and is working to address those. Cost reductions are necessary alongside fiscal reform because, at current prices, many prospective new projects are not viable before tax. However, I have been clear that this must be done in a sustainable way to preserve the skills, knowledge and talent for the future. Recent analysis by Professor Kemp has concluded that, if cost reductions are carried out in a manner that retains the skills base, it could result in a healthier industry over the medium and long term with enhanced investment, employment and production. In addition to retaining employment and skills capacity, cost efficiency must also be addressed with safety at the forefront. The safety of the offshore workforce is paramount. The health and safety executive that I met recently has made this clear and the Scottish Government stands firmly behind this approach. To recognise entirely that cost reduction is key to the short and medium term future of the sector, who does he believe has the lead in planning and delivering cost reduction in the oil and gas industry? The general issue of cost reduction is primarily the responsibility of industry to deliver. It is industry that devises how projects are managed, how they are specified and how they are delivered. I think that industry would be the first to agree that that is their responsibility. I know that they have told me so in many meetings there, but I think that we all have a responsibility to ensure that the framework within which they operate is correct and that health and safety interests are paramount. I know that Lewis MacDonald has argued that cause as well as have others. It is also important for the same reasons to listen that industry operators listen carefully in pursuing cost reduction to the views and experience of the supply chain. They, in the supply chain, are often best placed to advise on how costs can be reduced. For example, by agreeing simpler specification, by agreeing standardisation of some parts and some processes and on take-up of technical deployment and innovation, operators, contractors and supply chain need to work more collaboratively. That is the feedback that I have received from industry very clearly indeed. The North Sea must be seen as an attractive place to do business, and it is clear that the pace of progress in fiscal reform has been too slow. We have consistently called for a transparent, predictable and competitive fiscal regime. In 2011, we published proposals, including the introduction of an investment allowance to mitigate the chancellor's tax grab when he raised the supplementary charge from 20 to 32 per cent. In 2013, we published maximising the returns for oil and gas in an independent Scotland, setting out the approach that we would take to stewardship. Following the publication of Serene Wood's interim report in 2013 and final report in the summer of 2014, we made clear our full support. We agreed with him when he said that clear views were expressed, that fiscal instability has been a significant factor in basin underperformance, and we agreed with him last month when he said that six billion barrels of oil reserved could be lost unless radical measures are taken by the UK Government, Serene Wood. In January, we published an oil and gas discussion paper setting out the fiscal measures that we believe are necessary. We have also responded to the consultation on an investment allowance, setting out how a well-designed investment allowance could address many of the underlying challenges that exist in the North Sea. Given the stark outlook highlighted by the industry's latest activity survey, let me outline our proposals for urgent and substantive tax reform at the budget. Firstly, the UK Government must reverse the misguided supplementary charge increase from 2011. That will provide a strong signal to investors that the North Sea is open for business. Secondly, we are calling for a basin-wide investment allowance with a single rate of 62.5 per cent. That will simplify the fiscal regime and boost investment. Thirdly, we are calling for an exploration tax credit, failure on the part of the UK Government to bring sufficiently strong measures to address the dearth of exploration, which would be a serious error. Although it is essential that the chancellor uses budget next week to introduce these fiscal reforms with immediate effect, the Scottish Government is clear that that is only part of the longer-term process of reform, which also involves action and regulation. The UK Government must also maintain momentum on regulatory reform. We welcomed the announcement of the oil and gas authority and the appointment of Andy Samuel as chief executive, and on 25 February, Andy Samuel published his call to action. That set out the two most immediate risks. First, the profitability of producing fields will not be sufficient to attract continued investment, potentially leading to premature cessation of production and decommissioning of assets. Confidence in the future potential of the UKCS will continue to decline, resulting in critical long-term investment not being committed. The potential risks, Presiding Officer, simply cannot be overstated, and inaction is not a rational option. Two things are imperative. First, the UK Government must ensure that the oil and gas authority is consulted on all fiscal policy. Second, it is essential that the oil and gas authority has the resources and people in place now to take forward the action needed to mitigate the risks. That means sufficient people to do so. I want to talk about Scottish Government action, Presiding Officer. As I have outlined, it is clear that both fiscal and regulatory reform must be instituted now. I want to assure the chamber that the Scottish Government is continuing to make the best use of our devolved powers. I am committed to examine any further way in which we can possibly do more. I want to summarise some of the measures that the Government has taken. We have supported the skills needs for the sector through our energy skills investment plan and the creation of energy skills Scotland. We have also established the energy jobs task force. I am encouraged by the commitment and the collaboration that has been shown by all the members in the energy jobs task force. The commitment that has seen the establishment of a website to help to match individuals with employers, is one of the suggestions that came from one of the industry leaders in the task force, I believe. A large-scale pace event is to be held in Aberdeen this month and is targeted at individuals in the sector facing redundancy. We are supporting innovation and technology. Last year we saw the establishment of the energy jobs task force two weeks ago. What were the main conclusions of that particular meeting? One main conclusion was to set up a website. Another main conclusion was to ensure that individuals and job opportunities come together. A third main conclusion was to arrange a major event and with all the necessary preparation to make sure that at that event all the appropriate individuals are there. Those are urgent measures. They have been brought forward urgently. One should give some credit to Lena Wilson, the chief executive of Scottish Enterprise for the vigor, the commitment and the drive that she is displaying to this matter. I speak to her on a weekly basis. I get a full briefing from her. No one can persuade me other than the truth, which is that she is delivering the goods. She will do everything possible working with all Scottish Government and partners to ensure that we do everything that we can for the people that are involved. We are also supporting innovation and technology. Last year we saw the establishment of the oil and gas innovation council with funding of £10 million over five years. Our enterprise agencies are also supporting innovation. Today we saw the announcement of a £1.7 million project that will see a Scottish SME raptor oil leading a project on telemetry, wireless telemetry. That is through the memorandum of understanding that Scottish Enterprise has signed with Stat Oil. We have and are continuing to invest in the north-east with over £300 million on health infrastructure in the north-east since 2007. Of course, the Aberdeen western peripheral route, Balmedy, Tipperty road scheme, total overall capital investment of £745 million and something that is urgently required and comprehensively supported in Aberdeen city and shire. In conclusion, there is a long-term sustainable future for the North Sea. We are committed to using every lever at our disposal. What is needed and what is needed now is for the UK Government to act. We now have eight days until the budget. I hope that all those in this chamber can build consensus that substantive action along the lines that I have set out is required at the budget next week. Many thanks minister. At this stage of the debate we do have a little bit of time in hand for interventions. I should advise members on that. I now call on Lewis MacDonald to speak to you in move amendment 12587.2, around 10 minutes please, Mr MacDonald. It is not possible to live and work in Aberdeen today without being sharply aware of the current crisis in the oil and gas industry. Tens of thousands of people in and around the city work in the sector. Tens of thousands more are directly affected by how well the sector is doing. That is why the most common topic of conversation today is who is still working where, who has lost their job, who has moved away. However, it is not just an issue for Aberdeen. The oil and gas industry supply chain stretches right across Scotland and the rest of the UK. Offshore workers are as likely to live in Glasgow or Gateshead as in Grampian. The industry matters as much in many of the Highlands and Islands as it does in the north-east. The health of the oil and gas sector affects the whole economy, and everyone who works in it would agree that action is required. The question is what action is required from whom. The Scottish Government, in our view, took too long to acknowledge the scale of this crisis and still has too little to say about areas for which it is responsible. The setting up of an energy jobs task force chaired by Lina Wilson is indeed welcome. It needs to be more transparent. It needs to tell us what it is doing to pre-empt and prevent job losses before decisions are taken rather than simply to deal with the consequences of redundancy. However, there is a good deal of work for that task force to do if it is given the right remit and the right resources and if it is able to achieve the right level of public confidence. The suggestion that Lina Wilson and anybody else in Scottish Enterprise should be transparent about what it is doing to intervene before there are redundancies sounds a little improbable to me. How does the member expect industry to be discussing publicly its very private affairs? I think that it would be helpful if we knew who was attending meetings to the task force, where the meetings were due to be held, what time they were at and what was on the agenda. Of course, I do not expect commercially confidential discussions to be revealed, but I do expect some degree of transparency about a body of which the minister encourages us to have confidence in for dealing with such a critical sector. Of course, we were told that at the same time as the task force were set up, we were told that apprentices in the industry would not face redundancy because the Scottish Government would step in. Of course, it is welcome, too, but it is disappointing to learn that no extra resources have been made available to support that commitment. Those small steps are welcome, but they are not enough. We have seen last week an assessment by the Fraser of Ander Institute of the impact of a foiling oil price confirming that it is good for some parts of the Scottish economy but painful and potentially damaging for others. What we have not seen and what the minister did not tell us about this afternoon is a proper assessment by the Government itself. Last year, ministers were more than happy to proclaim the good news about North Sea oil. This year, the same strangely reticent. A low oil price is clearly… Of course. Christiana Lart. I thank the member to take an intervention on Vulpati Cremata. He talks about an assessment. How can we make an assessment before we know what the fiscal regime is going to be? Lewis MacDonald. I am not asking. The minister himself has said that we should not wait until five minutes before an election before we change the tax regime. We certainly should not wait for any reforms to the fiscal structure before the Government of Scotland takes action on the biggest economic crisis that Scotland has faced in months and indeed years. Let us get on with doing that. Let us get that assessment done. Let us see the Government take this issue as seriously as it deserves to be. Clearly, a low oil price is bad news for its policy of full fiscal autonomy. In that respect, its reticence is perhaps not surprising, but given its responsibilities for enterprise and for economic growth, it needs to carry out a full assessment of the economic impact of that low oil price without delay and publish the results. For example, we need to know, simple question, how many jobs have actually gone. I asked the minister—I asked the Government this last month—and the minister replied, but his reply referred to some of the job losses that were announced by then, but not to others. We know that many more jobs have gone since. If the Government wants to mitigate the impact of the squeeze on Scotland's oil economy, it could start by simply measuring it. Once it has done that, perhaps it will recognise the case that Labour has made for our resilience fund. We need all levels of government to work together to protect jobs and businesses. A resilience fund will help that to happen. In June 2009, Jim Murphy said when the oil price was $40 a barrel that there was no case for an oil fund in Scotland. What has changed? What has not changed is that the Stewart Stevenson is not paying particularly close attention to what I am saying. I am not talking about a fund for depositing profits from the oil industry that is made by Government. I am talking about a resilience fund that is created by the Scottish Government to help local government to work with sectors under pressure, whether it is in the oil industry or anywhere else in the Scottish economy. Let us have support from the SNP for that proposal and let us have some evidence that they take those issues seriously. A city deal for the Aberdeen city region would be a good thing, too. The oil jobs summit that was held in Aberdeen last month reached clear conclusions about the importance of major new infrastructure investment in and around the city over the next 20 years. It reflected in the launch of the city deal proposals yesterday, which were strongly supported by oil and gas UK and many companies in the oil industry. Both the Scottish and the UK Governments need to get behind that to make it happen, and I hope that the Scottish ministers will confirm their commitment to a city deal in the course of today's debate. The Scottish Government's political priority, we have heard it today, has been the same throughout the crisis, has been to demand that the UK Government cuts taxes for oil companies. The oil industry will, of course, argue for tax cuts. There is nothing unusual about any business looking for ways to cut its costs and seeing tax cuts as a pain-free way to save money. For the industry to argue for it is one thing. For Governments simply to accept that case without asking for any public benefit would be a different proposition. I hope and expect that there will be changes in the fiscal regime that will be announced in the budget next week. I am grateful for Lewis MacDonald giving way. Can Lewis MacDonald, just for the purposes of clarity, state what is the Labour Party's proposals as to which tax reduction measures should be brought in by the chancellor next week? Our proposals are that the Government should look at significant fiscal changes to incentivise its investment and to support the industry going forward. However, we should go beyond that, and that is something that we need to address today. Again, I look to the Scottish Government simply not to talk about tax changes being made by a different regime administration, but to talk about what it can do and what other changes it will support. Whether we are talking about a new investment allowance, changing the headline rate of supplementary charge or some other adjustment, the important thing, surely, is that the net effect of any tax changes on the willingness of oil and gas companies to invest their capital in the North Sea. It is the effect that is the critical thing here, and that is what we want to see. We believe that, yes, tax changes are required, but simply cutting tax will not do the trick. Oil companies are not paying taxes on assets that do not make a profit. That is why revenues to Government have fallen sharply in recent months and that is why they will fall sharply again later this year. The biggest risk going forward is not from taxes on those fields that still make enough profit at $60 a barrel. Those fields will continue to produce. The biggest risk is that those fields that are not currently profitable will be shut in and closed down sooner than they need to be. I thank Mr McDonald for giving way, and I noticed that he really did not respond to the minister. I will ask some simple questions. Does the Labour Party support an exploration tax credit? Do they support an investment allowance? Do they think that the supplementary charge should be reduced further? Yes or no in all three would be good, please. The Labour Party certainly supports tax changes designed to achieve the objective of greater investment and greater exploration. That is a simple proposition. It would be good to know that the SNP, rather than simply trying to micromanage someone else's budget, was bringing forward proposals of their own for what they are going to do for the areas for which they are responsible. Sir Ian Wood's best estimate last year was that 16 billion barrels might still be produced from the UK continental shelf. In current circumstances, as the minister has acknowledged, that could fall to as low as 10 billion barrels if too many marginal fields go straight to decommissioning. That amounts to potential loss production worth more than $300 billion even at today's prices, more if the price does indeed recover in due course. UK ministers should go beyond fiscal incentives to work directly with operators of those marginal fields to ensure that they are not abandoned prematurely, rather than offer only tax cuts that mostly benefit profitable fields, the Government could also offer to share production costs on marginal fields. Many first-generation fields are either at their end of their life or depleting fast, yet many of the platforms in those mature fields host vital infrastructure that allow smaller, more recent discoveries to export their product to shore. I would be delighted to have signed those components. I was waiting to hear something from Mr MacDonald about the issue of co-investment. It seems to me that we have got ourselves into a terrible situation in the UK where the public sector is willing to hand over to the private sector anything that is profitable but to prop up with taxpayers' money anything that is not profitable. Surely that is not Mr MacDonald's approach to public ownership? Far from it, there is a clear public interest in maintaining the infrastructure of the offshore oil and gas industry. Even whether those fields are commercial propositions or not, in those circumstances, the Government itself can step in as a lender, as a co-investment partner or even as a facilitator to ensure that assets are safely maintained for as long as they are required. The oil and gas authority set up in response to the wood report is now in place. It is already tasked with promoting more collaboration in the industry, not least in the area of infrastructure. The sooner that it can get on with its job, the better. We know that company after company in the north-east has laid off staff and contractors by the hundreds, mostly onshore. Thousands of jobs have been lost. In the past, it was easy to leave an employer on a Friday and find a new job on a Monday. The sector-wine downturn now leaves people with far fewer options. The next big issue will be the terms and conditions of offshore workers. Many in the construction trades who work offshore do two weeks on and three weeks off and are now facing demands to go to three on and three off. Those demands are being resisted by their unions, and it is easy to understand why, given the tough environment of offshore workers face. If you could begin to draw to a close now, that would be helpful. I certainly will. Some of those who are most likely to walk away if shift changes are imposed are precisely the older workers with the greatest know-how who are the people the industry cannot afford to lose. We need to see action not just by Scottish Government and UK Government but also by industry itself to protect the jobs and the skills that they need for the future. Industry as well as Government must step up to the plate, cut out wasteful practices, support its workforce to protect future skills and work with Government to maximise economic recovery. That way, the oil and gas sector can hope to continue to produce in Scottish waters for another 40 or 50 years, securing jobs for another generation and providing an even stronger basis for a global marine energy industry based here long after that. I move the amendment in my name. Many thanks. I now call on Murdo Fraser to speak to you in move amendment 12587.1, around six minutes or so, Mr Fraser. Thank you, Deputy Presiding Officer. Well, I welcome the chances afternoon to debate the future of the oil and gas sector, a debate that is timely given the pressures on the sector as a result of the fall in oil price. I would have to say gently to the minister that for a man who claims to be seeking consensus he spent a great deal of his opening speech trying to score political points. I have made the point many times before that a falling oil price is good news for the overall economy. Costs to businesses are coming down, particularly significant for energy heavy sectors such as manufacturing. Those involved in transport are seeing a welcome bonus and the ordinary consumer has more money in his or her pocket and therefore more money to save or spend in the shops. As Lewis MacDonald pointed out, the Fraser of Allister Institute has said that the Scottish economy could grow by an extra 0.25 per cent as a result of the fall in oil price, and that could mean up to 10,000 new jobs. However, as has been acknowledged, the fall in oil price is bad news for the oil and gas industry, which creates acute short-term pressures. Ian Wood has warned that as many as 15,000 jobs are at risk if the oil price remains low. To tackle that, everyone must work together. That means the industry, the UK Government and the Scottish Government. In that context, the terms of the Scottish Government motion today are very disappointing, with its bare-faced statement that the Scottish Government continues to do all that it can to support the sector. Really? No room at all for improvement? Nothing that could be done better. That is just wreaks of complacency. I will give way to Mr MacKenzie. Mike MacKenzie? I just wonder if you, if the mud of Fraser feels that the UK Government is doing all that it can in good time to support the oil and gas industry. Mud of Fraser? Mr MacKenzie has not been listening to what I just said. I said that all sectors must do more. The industry, the UK Government and the Scottish Government, I do not know why they did not hear me say that point, but it is not enough just to say that it is all somebody else's fault. The minister spoke for 13 minutes. He spent 10 minutes setting out why the UK Government had to act, and in a few minutes at the end set out the action that the Scottish Government had already taken without a word of what additional was going to be done. We actually agree—I need to make some progress—as the minister acknowledged, that more needs to be done to create an attractive fiscal regime. The supplementary charge was already cut by the Treasury from 1 January as part of an ambitious programme of reform across the wider oil and gas tax regime. We have also called for fast-tracking of the new investment allowance, a call widely echoed by those in the industry. While, as an economic liberal, I am always pleased to welcome broad support across the political spectrum for the principle of tax cuts, I think that we need to recognise that tax cutting is not a panacea for all the North Sea's problems. Sir Ian Wood himself said a few weeks ago that, even if all the tax cuts called for were delivered, it could be six months or more before the changes had any impact. There is more that can and should be done, and it is extremely disappointing that the Scottish Government's motion concentrated only on this one aspect when action is required in other areas. Sir Ian Wood also said, and he was not quoted saying this today by the minister, but he said, let's put that divisive referendum away on a back burner for a long, long period of time. Now, if we go back to the referendum, we were treated in the run-up to it, to regular oil and gas statistical bulletin publications, all of them predicting boom times ahead. The first oil and gas statistical bulletin, issued by the Scottish Government on 11 March 2013, said that Scotland is in line for, and I quote, a renewed oil boom. Production in Scottish waters, it predicted, could generate up to £57 billion in tax revenue by 2018. Speaking on that day during a visit to Aberdeen harbour with Mr Swinney, the then First Minister, Alex Salmond said that there can be little doubt that Scotland is moving into a second oil boom.  He's not here to defend himself. That's not unusual, Deputy Presiding Officer. Perhaps Mr Brody would like to do it for him. Thank you for taking the intervention. You went on about the Scottish forecast. Two days after that, the OBR forecast that the price of oil, price per barrel of oil, would be $100 through 2019. Were they wrong, too? We don't know how those forecasts are going to work. At what seems extraordinary, is that the OBR forecasts were dissed all the way through the referendum debate by Mr Brody and his colleagues. He said that they were too pessimistic. The entire case for independence was built on an oil price of $110 a barrel, as a minimum, as we well know. I'm astonished that Mr Brody has the brass neck to stand up as Mr Salmond's vicar on earth, it seems, in this chamber this afternoon and try and make that case. What has happened to the statistical bulletins, Deputy Presiding Officer? We saw them with regularity prior to the referendum. Why do we no longer see them? Are the figures so dismal that the Scottish Government are afraid to publish them? Today, Scotland will be breathing a collective sigh of relief that we didn't vote yes to independence, based on the promise of a second oil boom. We didn't go for that financial model, assuming an oil price of $110 a barrel when today the price is half that. Thank goodness that the Scottish people had the sense to vote to remain part of the United Kingdom and not gamble their future on the say-so of Mr Salmond or his colleagues. I said earlier that there's more that could and should be done to assist. I would like to raise the issue in the few minutes remaining of the Aberdeen city region deal. That will be worth around £2.9 billion over 20 years, with proposals for transformational investment in transport infrastructure, for significant expansion in housing and for city centre regeneration. A specific proposal to help the oil and gas sector is for the new Oil and Gas Technology Institute, establishing a world-class centre of innovation and excellence in the city, supporting innovation, and all that is underpinned by an economic strategy focusing on internationalisation, innovation and skills. It is an exciting partial of proposals to benefit both Aberdeen city and Aberdeenshire, which requires the support of both UK and Scottish Governments. It demonstrates leadership and ambition from two local authorities. It has widespread buy-in from many in the private sector and enthusiastic support from oil and gas in the UK. Today, the Scottish Conservatives are happy to lend our voice in support of those calls. If the Scottish Government is looking to do more than just sit on its hands and blame Westminster, it should join us in supporting the city bid proposal. I'm pleased to support the amendment in my name. Thank you very much. We now turn to the open debate speeches of six minutes, with around 30 seconds or so for each member for the purposes of interventions. Kevin Stewart, to be followed by Michael McMahon. I welcome the opportunity to discuss the oil and gas industry today. As members can well imagine, there is a level of uncertainty in Aberdeen at this moment in time, which is being exacerbated by the inaction of the UK Government in response to the drop in oil prices. The inaction is summed up in comments by Professor Alec Russell, which the minister has already mentioned, but I will add to him. Professor Russell said that the UK Government has been very slow. It is trying to time it just prior to the general election. It is playing politics for the future of the North Sea oil industry. The pace of change from Westminster has been just dire, absolutely dire. He concluded that the UK Government has been very tired about making things happen. Will she not be surprised that short-term party political gain by the current Government has come into play as we need a general election? A short-term political gain has always been the attitude of Westminster Governments when it comes to their handling of the North Sea oil basin. Mismanagement rules supreme, and their cavalier attitude is summed up in the words of Malcolm Webb, who wrote in the energy voice in the fifth of January, saying, There have been times when I have been truly bewildered by the way in which successive Governments have treated the UK offshore oil and gas sector. We have experienced repeated and increasingly aggressive tax hits, pushing taxation rates on production up to a maximum of 81 per cent, while, at the same time, an under-resourced overstretch regulator failed to deliver the expert and engaged stewardship, which this mature and complex basin so badly needs. Industry leader Malcolm Webb. We have seen a myriad of ministers taking decisions about the industry and a mass of Whitehall civil servants mapping plans and strategies from desks that may as well be light years away from the operations in the North Sea. Malcolm Webb again says that we have had years of confused and confusing energy policy, not helped by a revolving door approach to the appointment of ministers. We have seen a total of 35 different energy and treasury ministers given responsibility for our industry in the last 14 years. In the oil and gas UK 2013 activity report, they said, taking into account the two- to three-year average time lag between investment decisions and first production, the lack of new fields coming on stream can be attributed to the damage done to investors' confidence by the numerous adverse tax changes in the early and mid-90s. On 24 February, I put a motion forward in this Parliament about the situation in the North Sea basin. I pointed out that, since 2005, Norway, who has had an exploration tax credit since that date, has seen drilling increase fourfold, leading to the discovery of more oil reserves, including the Johann Sferdrup field. Here, we have seen 14 wells being drilled last year, and as the minister pointed out, we will probably see less in the coming year. In that motion, I also called for an exploration tax credit, a reduction to the headline rate of tax in the North Sea and an investment allowance. I am really surprised that Lewis Macdonald from the Labour Party could not tell us today whether the Labour Party supports those moves, because I think that they are vital to ensure the future of our North Sea economy. I am grateful to Mr Stewart for his apparent expertise in those matters. Can he tell us simply what he believes the appropriate rate of sure oil and gas taxation ought to be? Kevin Stewart? I think that it depends on the field, Mr Macdonald. I think that that is one of the reasons why it is so evident that you are not paying attention to what is going on, that you would ask such a silly question to be honest with you. You may think that I am the so-called expert in those fields, but your ignorance has been shown today by the lack of being forthcoming about what you support and what you do not. I want the workforce in the North Sea to thrive for many decades to come. I think that those measures that have been put forward very sensibly by a minister who has been in post for a long time, who has engaged with the industry, are the right things, and I think that that is what the industry wants to see. In today's N56 Scotland Means Business report, the stock talk of the Norwegian-style long-term strategy to fully exploit the oil and gas reserves left in the North Sea. It says that this plan would far exceed the scope, scale and ambition of the myriad of existing strategies and business plan. It echoes the strategic approach that is taken in Norway, where policy has been developed by government, the industry, public sectors and others working collaboratively to identify the measures that are required to maximise the sector's long-term economic contribution, giving much greater support to the industry from government. The report also recommends that key decision makers should be relocated to Aberdeen. I fully endorse their view so that they too can be at the heart of the industry, so that they can hear not only from the high hedions but also to listen to the views of all of the men and women who work in the industry. For those of us who live in the north-east, who have family and friends working in the industry, we live and breathe what is going on in the North Sea Basin in the offshore supply chain and how the morale of the industry has an effect on all north-east businesses. If the deck and treasury officials were there, they would feel that that too and may think differently before they recommend the implementation of damaging policies and strategies. It is absolutely vital that we maximise the yield from the North Sea to protect jobs, to remain world leaders and to safeguard the economy of the north-east of Scotland. The Scottish Government has laid out its long-term strategic vision for the industry. I hope that Westminster will undergo a damasene conversion and will do likewise for all of our sakes. When I began my welding career in 1977, it was at a time when many of those who worked in that trade were transferring from the declining shipbuilding yards in the upper Clyde to the emerging yards that were expanding into the production of jack-up and semi-submersible rigs for the North Sea oil fields. I was acutely aware of that from that time, just how important the success of the North Sea oil industry was for manufacturing in and around the Clyde. I was also aware at that time that politicians and people within the industry were already looking forward to a time when the oil would run out and I commend an adjournment debate hosted by Dick Douglas some years ago. Within those days, it was referred to as a depletion policy, not a negative thing but just being realistic. It is a finite resource that was being identified and it will run out and it has to be managed. That was the point that was being made. Recently, I spoke at a public meeting in Belsil and warned the audience of the danger that the sudden reduction in the economic position of the North Sea oil would be not just for the north-east of Scotland but for our local economy. It is always easy to be wise after the event, but because of the downturn that we have seen in demand from the oil industry, a local company in my area soon afterwards made some of its employees redundant immediately and will now let natural wastage continue to allow the workforce to decline further over the rest of this year. That is a direct consequence of the situation in the north-east. That confirms to me the potential impact in Lanarkshire of ever making our economy overly reliant on the volatile oil sector. The Scottish Government's prospectus for separation ignored the risks that an oil price shot would mean for us, yet those of us who are concerned about the future of the oil industry were only being realistic. Unfortunately, we have seen not only those local job losses but the publication of a series of reports that tell us just how serious the situation is for the oil industry overall as we look to the immediate future. That message could not be clearer and it asks that both the Scottish and Westminster Governments have to change their thinking. Fortunately, a blueprint for the way forward has existed for some time, which would help the oil sector through this immediate problem. It is now absolutely crucial that the reforms recommended by the eminent oil expert Sir Ian Wood and his strategy for economic recovery in the North Sea are implemented. That was needed even before the oil price crisis, as the North Sea oil industry was already in decline. Although statistics tell us that last year saw a record level of investment in the North Sea at £14.8 billion, that has to be recognised in the context that it rose from the previous year because of slippage in projects and cost overruns. There has been a gradual decline in oil production over a number of years now, although the rate of that decline has been getting much less steep. Over the previous three years, the rates of decline were 19 per cent, 14 per cent and 8 per cent, but it was only 1 per cent down during last year, and that is a good thing. However, it has to be noted that there has been several years of investment from producers so that in 2015 we should see the first rise in production since the peak of 15 years ago. However, that means that it has taken that huge increase in investment to see production rise by only 1 per cent. So, while there has been a welcome increase in the amount of finance going into oil extraction recently, it takes all of that to squeeze more out of the matured fields. So, nothing can disguise the bad news from this year's Oil and Gas UK activity report, which reflects the plummet in the oil price. The report covers a period when the oil price was still at around $75 a barrel, so it does not capture the full extent of the slashing of operating costs, investment and drilling that we are going to see. In 2012, the cost of producing the average barrel was £13.50. Last year, it hit £18.50. The cost of finding the average barrel of oil has risen from £4 in 2009 to £22 now. In total, there are around half the number of wells being drilled than there were 10 years ago. In response to those facts, the industry message to Governments is to call for smarter regulation and lower taxes, in line with Sir Ian Wood's industry review of last year. We seriously need to see Government action to sustain confidence within the industry over the next few years. We cannot simply turn the oil industry on and off. We have to maintain a degree of support for that sector. The oil prices, like prices elsewhere and commodities, are volatile. If we had an oil fund many years ago, we would not have had the problems that we have with the volatility. Mr Brodie, we cannot hear you if you do not address your microphone. Unfortunately, I could hear the question.  The SNP always talked about the oil fund that would have saved all the money, which was being spent on the capital infrastructure that the country has benefited from. It talked about the Norwegian oil fund, but it does not tell us that Norway does not have a motorway system that compares to what we have in this country. You cannot save money and spend it, Mr Brodie, and that is a fact that you will have to come to terms with at some point in the future if you want to be taken seriously. The Scottish Government has to stop its pretense behind its overly confident projections and accept that the process of winding down is happening now. It is quite right to pursue the Westminster Government over the responsibility of promoting a more conducive investment climate for the oil industry in the North Sea. However, while that problem affects the North East most acutely, the supply chain reaches all the way across the whole of Scotland. The SNP's predictions for oil future range from the optimistic to the wildly optimistic, but the oil and gas UK analysis adds to Sir Ian Woods and shows that we need to ensure that Government action is taken now to support investment in the North Sea and for as long as it can be into the future. As Fergus Ewing stated, there have been fluctuations over the years, but it has not had to be that way very often since the industry was pouring money into platform fabrication yards in the 1970s ahead of the revenue tap being turned on in the 1980s. Action is needed now from both the UK and the Scottish Governments. We may no longer call it a depletion policy. We can call it what we want, but it has to happen and it has to happen now. Many thanks. I call on Nigel Dawn to be followed by Tavish Scott. Thank you very much, Presiding Officer. This is going to be one of these very interesting debates that goes from the absurd to the extraordinarily important. The important bit about this, of course, is that oil and gas is a very significant part of the economy. The absurd is the speed with which colleagues across the chamber are pointing their finger at somewhere else rather than recognising we are actually all in this together. I cannot be surprised that Moto Fraser spent so much of his time telling us that we shouldn't rerun the referendum and they did. Michael McMahon tells us that we shouldn't make savings because it reduces expenditure, ignoring the fact that you should save when you're actually expending a finite resource. You should be spending recurring income. Let me move on very rapidly to Moto Fraser's comment about the Scottish Government's motion, which says that the Scottish Government is doing all that it can. I think that the Scottish Government is doing all that it feels it can and all that it's identified, but I do think that I heard the minister say that, if other people have got other suggestions about what we should be doing, then please pass them on. He's nodding as I speak, and I think that there is a serious willingness within the Government, and I would certainly support it from the back benches, to consider anything else that anybody else does come up with, but the issue, as always, is if you're going to spend money, where is it going to come from. I think that we ought to establish that at least in the Government's opening position. I don't want to repeat, Presiding Officer, what the minister and others have already said about what the Scottish Government is doing, because I'd like to look at what the UK Government should do, not because I want to rerun the referendum, but because everybody knows that the fiscal regime is set by Westminster. It is quite straightforwardly the case that tax regime, however you would like to see it modified, and the Scottish Government has come up with some very specific numbers, and the Labour Party won't come up with specific numbers, but I take Lewis MacDonald's comments about the basis on which he would like those numbers to be established, but whatever we outcome up with there, it's the UK Government's responsibility. Please, let's stop pretending it might not be. It does come down to a budget in a week's time, and we really do want something to be done. It's already long overdue. What I do have to admire is Lewis MacDonald's attempts to man the guns as the Labour Party ship sinks around him. This is nothing other than what I would have expected Lewis MacDonald would be the best leader of the Labour Party if they only managed to elect him, but he insists on telling us that the Scottish Government should put together a resilience fund at the point when our budget is not only lower than it ever has been, but is still going down, and then wants to insist that the fund which his new boss, Jim Murphy, now hang on a moment, let me just get to the end of the sentence, then wants to tell me that the fund which his new boss, Jim Murphy, told me was inappropriate should now not be put together by the UK Government, which is getting all the revenue from oil and gas, but should somehow come out of the Scottish budget, which, as I've previously mentioned, is falling. The Labour Party now wants a Scottish Government fund to do what the UK Government has steadfastly refused it over the period, and since I'm talking about Mr MacDonald, I'll let him in first. Lewis MacDonald is grateful to Mr Don. Surely he accepts the logic that the Scottish Government, with its responsibilities for enterprise and with its central purpose of sustainable economic growth, does indeed have a very direct responsibility for supporting sectors of the Scottish economy, which are under pressure. That is precisely what Scottish Enterprise does, and precisely why a PACE team will be in Aberdeen, as I understand it, if I recall right next week worrying about precisely those things. The Scottish Government is not responsible for the huge amount of taxation that has come from the North Sea, and therefore not responsible for setting up the very fund that should be there, which the Labour Party, as I recall, was responsible for, and the Tories, I think, now are responsible for. If I might move on briefly, Presiding Officer, I'd like to consider the issue of retraining, because clearly the Government is trying again to do everything that it feels is appropriate, and if there are other things we've missed, well maybe that might be suggested, and I would just like to make one suggestion, because I've had comments made to me by constituents who, of course, are finding themselves made redundant within the oil and gas sector. That's not much fun, I've got that t-shirt, but it wasn't the oil and gas sector. I'm also very conscious, as the Minister will be, that the construction industry is actually growing a little at the moment, expanding, and there are some pretty large projects going on around there. I do just wonder whether the retraining is necessarily sufficiently focused on the very short-term retraining that might be necessary for very skilled people from the North Sea to actually find their way into the construction industry. It doesn't take four years for a fitter, for example, from the North Sea to turn into someone who could build you the woodwork around a house. They don't have joining skills, but it would take them weeks rather than years to get from the position of being able to do one to the other, because they have most of the manual and intellectual skills that go with it. Do you just wonder whether those training facilities and opportunities are actually available as they should be? If the minister would like to comment on that. I think that Mr Don has raised a very good point, which is that some of those who may face redundancy might wish to think about moving into other sectors of the economy. That, incidentally, is why a representative of Scottish engineering is on the task force. I will make sure that his specific suggestion is relayed to Lina Wilson so that it is specifically considered by the task force. I will welcome any other specific suggestions of a positive nature in this debate, such as Mr Don's. The only other thought that I have on this is talking again to businesses within my constituency. My feeling is that some of the structures within the service industry in the North Sea are building in costs, which the industry has been able to sustain over a period, but which are probably no longer sustainable. I do think that the industry needs to look at whether some of its service contracts should actually be renegotiated. I am very concerned, and I do share, Mr MacDonald's comments in there, that the cost efficiencies need to come out of the structure, need to come out of the way things are done, not out of the pay packets, but necessarily of those who are doing the job. Although inevitably, market forces are going to mean that, when people are in greater supply, their premium is bound to fall, but we cannot do anything about that market, but we should be encouraging the industry to look seriously at its cost structure for the future. I refuse to talk the oil and gas industry down at a careers convention at the Anson High School in 1982. The then-BP terminal manager said that Suleyman Vaw would be closed by the year 2000, and there would be great oil careers all around the world. My children's generation now work at Suleyman Vaw, and I believe that their children will, too. This is, as the Minister, Andrews McDonnell and Murdoffraiser rightly said, a very tough period. The industry does indeed need action here in Edinburgh, but, of course, in London as well. As Jeremy Cresor puts it in his introduction to the Press and Journal's 50th anniversary energy edition, with the right fiscal regime, government policies and incentives, a vigorous mix of adventurous oil and gas companies partnered by a switched-on supply chain, the North Sea could easily buzz for another 50 years. Why entirely endorse that sentiment? There are three essential pillars for change, reform of the fiscal regime, the cost competitiveness of the North Sea industry versus the rest of the oil world, and the assistance that the government here in Edinburgh should provide on infrastructure and on skills. Yes, Presiding Officer, there must be cuts to tax rates for the UK continental shelf. All governments, of course, will seek to extract revenue from profitable business. The SNP's independence white paper that the minister mentioned in his opening remarks, based on $110 a barrel, maintained existing tax rates, so a nationalist government is no different from any other in wanting oil tax revenues. But now oil is $60 a barrel, there or thereabouts, and has been as low in the low 50s in recent weeks. Where it will settle is beyond most economists, never mind politicians or governments. But tax must fall to help the industry invest for the long-term future of the North Sea. The supplementary charge should be reduced in next week's UK budget. The UK government have, since 2011, introduced field allowances that offset profits from that charge. But the regime now seems to satisfy neither the requirement of government to extract a fair and true economic rent, nor the need to sufficiently encourage capital investment in the industry. The UK government should hold to the Woods Review's objective of obtaining, rather, maximum economic recovery. That's in Scotland, that's in the UK, and it's very much in the industry's interest. There should be a new investment allowance to simplify the plethora of existing schemes. As BP's Tim Smith said at the Crossbody Group on Oil and Gas here in Parliament just the other week, capital expenditure in the UK continental shelf is not about BP versus Shell versus TACA. It's about BP's North Sea team winning the investment case within BP against other worldwide opportunities with lower wage costs, less regulation and easier geographic and climatic conditions. So a simplified and lower tax regime, Presiding Officer, helps the industry win that bidding round. A newer lower tax regime helps the industry give clear sight to a future and shows the UK government's commitment to that future. In Shetland, in my constituency, we've escaped the worst impact of the following crude oil price, although, as Murdo Fraser rightly pointed out, petrol prices falling at the pump have been a very welcome upside to $50 a barrel, both for households and for businesses. But BP have now announced a delay to their Sulunvo gas sweetening plant. BP's North Sea boss, Travegarlic, explains that this is a delay, not a cancellation. I agree with that assessment. The French major Total are investing £3.3 billion in the enormous Lagontormor gas field west of Shetland. A huge new gas plant is being built at Sulunvo that will export to St Fergus next to Peterhead. BP will need gas sweetening, too, Presiding Officer, for the west of Shetland gas fields. BP believe, too, that the vast, clear field west of Shetland has 30 or 40 years of production life. The issue there is not so much what can happen in the future, but it's in the interests of the industry to get, as other members have rightly mentioned, their costs under control. The legs of this industry are about the cost that need to be kept and maintained under control. The east Shetland basin and the central North Sea, the key is to ensure decommissioning doesn't happen too quickly, a point that I've heard the minister make in previous debates. Mature production fields are costly both to maintain and now, of course, on current prices to operate as well. Once key infrastructure, production rigs, pipelines are turned off and removed, other fields cannot export. By 2019, more than half of the UK continental shelf production is likely to come from fields that started production since 2012. The new oil and gas authority, mentioned by others in this debate, has a vital role here in extending the life of mature production fields. Decommissioning will, of course, be a huge industry. Look at Shell's Brent field. Many of us would be disappointed that Shell didn't choose to place that work in Scotland, although I recognise that Aberdeen does get a huge amount of the office-based work that will come through that decommissioning. The Scottish trick here is to win much of the actual decommissioning, the hard engineering and pulling apart of those enormous platforms here in Scotland and in places such as Shetland. West of Shetland, of course, is enormously challenging. The region hosts on the latest figures at least 17 per cent of the remaining oil and gas reserves, and I suspect that, based on those matters, that is an underestimate. It was challenging at $110 a barrel, Presiding Officer. Sheffan pulled the plug on their Rosebank development at $110 a barrel. That wasn't because of a fiscal regime, it was because of the cost of doing business in Scotland at this time in the UK at this time. All the oil companies and UK oil and gas make an important case about cost. We should welcome Deirdre Michee as the new boss of UK oil and gas. I very much like to recognise that in this debate as well. That is the second pillar of building that new future for the industry, getting costs under control. I sat next to an engineer flying home to Shetland the other week from Aberdeen. He said and told me about the hikes and wages that Lewis MacDonald described and Kevin Stewart did as well. The hikes and wages that have taken place over the last number of years with people literally flitting from one company to another, that was a bubble that had to burst at some stage. Of course there is real pain in that, and there is no doubt about that. We need to help on that, but with industry changes, with Government help on tax, there is a very strong future. Let me finish with Sir Ian Wood, who was rightly mentioned by others in this debate. He did not just produce a report on the North Sea last year. He also chaired a commission on developing Scotland's young workforce. I hope that many of Scotland's next young engineers, men and women, will want to work in the oil and gas industry as well. I am afraid that I have to advise members that the extra time I have, the 30 seconds is for interventions only, and we will quickly run out. Mike Mackenzie, to be followed by David Stewart. Presiding Officer, I am pleased to follow Tavish Scott in what I think was the best speech. I have heard him given this chamber, and I am happy to say that I agree with a lot, perhaps not everything that he says. Presiding Officer, with 35 UK energy ministers over the last 14 years and 16 major fiscal changes over the last decade, it is no wonder that our oil and gas industry has never performed as well as it might have done. Energy is a complex subject, and UK energy policy has been inconsistent for a very long time and not fit for purpose. Either in terms of supporting industry, delivering value for the consumer or providing energy security. We know that because of a lack of investment in new generation, leading to spare capacity generation now well below 4 per cent. We know that because of fuel poverty at rates of over 30 per cent across Scotland and over 50 per cent in our islands. We know that because of whole-scale despondency across the energy sectors, nowhere is this more true than in Scotland's oil and gas sector. Anyone in any doubt about this is only to read Sir Ian Wood's oil and gas review report published just over a year ago. Couched in respectful language, it is nevertheless a biting criticism of both DEC and the Treasury. Ian Wood complains that DEC has failed to provide a proper regulatory regime that is up to date with current practice. He complains that fiscal policy has been inconsistent and has strangled the industry, creating uncertainty and deterring investment. He complains that DEC has failed to talk to Treasury colleagues and that regulation and taxation have often worked at cross purposes. The report suggests that implementation of its recommendations will lead to an extra 4 billion barrels of oil equivalent over the next 20 years, and it suggests and I appreciate that this is a long-term projection that the value of this to the economy could be over 200 billion. The report does not calculate the losses we have suffered over many years as a result of the UK's disastrous oil and gas policies. It does not estimate the losses to the economy, it does not estimate the losses to the oil and gas industry and it does not estimate the losses to the Treasury. We know that the UK Treasury has benefited from at least £300 billion from oil and gas since the 70s. How much more might have been raised under an effective regulatory and fiscal regime? We can perhaps look at the Norwegian sector of the North Sea and make an estimate. Norwegian recovery rates are approaching 60 per cent, whereas ours are stuck at 40 per cent. Serene Wood's review does not mention either an oil fund, it does not mention that of all the oil-producing countries across the world, only the UK and Iraq do not have an oil fund. It does not say that our Norwegian neighbours have an oil fund worth over £550 billion. Despite what Mr McMahon is saying, I find it very hard to feel sorry for the Norwegians with their massive oil fund. Serene Wood's report does not describe the failure to establish an oil fund as the tragic mistake that it was. Serene Wood's report was published at a time when oil prices were relatively high, but the conclusions are even more relevant now. However, enough of what the experts say, Jim Murphy has decided that it is now time to have a different type of oil fund. His oil fund is one where the Scottish Government introduces cuts in public services to be allowed in the oil industry when prices are low, while the Treasury rags in the profits when prices are high. A few months ago in this chamber, Ian Gray was asked the question, where will the money for an oil fund come from? Jim Murphy has provided an answer. It will come from cuts in Scotland's services. I am very happy to take an intervention from Mr Gray. I am very grateful to the member for taking an intervention, but perhaps I need to remind him that it was, in fact, in this chamber during the budget debates that we called for a resilience fund. We identified the money, it came from budget Barnett consequentials and, unfortunately, the cabinet secretary rejected our proposal. Mike McKenzie. Miss Bailey is very good along with her Labour party colleagues at spending money twice over. The sad thing is that this is just part of an oppositional agenda from the Labour party that is much more concerned with harming SNP than it is about helping Scotland, because the Labour party has no vision for improving Scotland. It is no vision for Scotland other than half-heartedly mitigating the damage done by Westminster. It is no vision beyond austerity, peppered with the odd bits of back-of-a-fag packet policy dreamt up overnight by Mr Murphy. That is why I suspect the electorate is withdrawing their mandate. However, they have talked for a long, long time now about the broad shoulders of the UK. It is now time for the broad shoulders of the UK to provide proper support for our oil and gas industry. Many thanks. Could members hoping to contribute to this debate to ensure that the request to speak buttons are pressed, please? David Stewart to be followed by Rob Gibson. Thank you very much, Presiding Officer. Last weekend, as I was clearing out mountains of old books to send to charity, I came across a dust-covered copy of the Tony Ben diaries. Reading them again, I was very much struck, Presiding Officer, by the sense of optimism and expectation that existed in the public psyche in the early 1970s around the discovery of oil and endine gas in the UK continental shelf. Members, of course, will be aware that Tony Ben was Secretary of State for Energy. He had been alleged in the press at the time that he had been demoted to that post by Harold Wilson. I looked at a tabloid cartoon from that time, which said that because energy was so important, as it is now, Presiding Officer, that Tony Ben's next emotion would be to Prime Minister. I can see that there is a faraway look in Fergus Ewing's eye, as I mentioned that point. I would like to touch on the wider international scene facing oil and gas. Of course, as many members have done, I referred to the wood review and finally to the fabrication industry, which has just been marginally discussed this afternoon. Members will know that Tony Ben actually came up with two excellent initiatives in the 1970s that still, in my belief, have validity today. Of course, there have been some echoes in the recommendations of the wood review. The first was to have a state-run British national oil corporation and national champion for the UK, in the same way that Norway has stat oil and France has total. The second was to set up the offshore supplies office. I refer, as other members have, to the P&J's excellent energy magazine this month, which had a comprehensive and excellent analysis of the offshore supplies office. Members will again know that Margaret Thatcher, and that is where Alex Johnson gets excited, privatised the production business in 1982 and was subsequently taken over by BP. In 2011, you agree with me that Tony Ben was honest enough in later life to admit that whilst he was the energy minister, he had made a mistake in commissioning new nuclear power stations and also in not establishing an oil and gas fund. The two centres excellence was what he actually did. We do not have time to do an analysis of the state of the market and oil and gas when it was first discovered, but clearly it was underestimated. I think that the work that it did carry out was first class, particularly the offshore supplies office. In 2011, I asked a few questions on OSO. In fact, I think that it was Fergus Ewing that responded. I have just quote. It said that the work of the offshore supplies office led to an increase in the share of the UK continental shelf market obtained by British industry. Many companies that take benefits have enabled them to flourish both domestically and overseas in later years and sites. The development of subsea technologies is a particular success story. Perhaps the minister in his wind-up could address this question. Do we need a new offshore supplies office to support Scottish industry in manufacturing and help them to grow and develop, particularly the view to increasing supply chain capability? I am well aware of the EU procurement rules, which were different at the time that the OSO was set up. I think that Mr Stewart makes a very good point that assistance with manufacturing is required, but that assistance is provided by SMAS, the Scottish Manufacturing Advisory Service, through Scottish Enterprise. Just last week, at a visit to Hydrosun in Avymor, the assistance of SMAS was praised to the Hilt. David Stewart. Thank you, the minister for that very helpful intervention. Ian Wood's review of the industry, as many members have commented on, was comprehensive, insightful and, I believe, the series of important recommendations about future strategy. Again, members will know that, whilst the UK is now a net importer of oil and gas, the UK continental shelf plays a crucial role in energy security, the economy and, of course, employment. For example, the UK continental shelf met 67 per cent of the UK's oil demand and over half of the UK's gas demand in 2012. As we have heard from other members in the debate, around 42 billion bars of oil have been produced. Estimates for the remaining oil, of course, varies. The range being generally accepted has between 12 and 24 billion barrels remaining, but the UK continental shelf is one of the most mature ofshore basins in the world, but it is not uniform. That is crucially important. It has a combination of introductory, maturing and declining fields. As a generalisation, and there are some exceptions, I appreciate, new discoveries tend to be smaller and, in geologically more challenging situations, more expensive and difficult to exploit. Many rig assets are more than 30 years old and well beyond their intended design life. Would the minister and his wind-up address the potential for the decommissioning of rigs in the Scottishards, such as Arnish and Nig? I take his point from last week that he does not want to prematurely decommission rigs because of the expense involved, but if he takes the point that, as Ian Wood said, many rigs are beyond their natural shelf life, decommissioning, particularly in Scottishards, is vitally important. Of course, the Wood review had a number of important recommendations, such as the strategy for maximising economic recovery, the creation of new regulatory body and developing sector plans, such as decommissioning, enhanced oil recovery and exploration. Ian Wood argues that full implementation of the recommendations would deliver three to four billion barrels of oil over the next 20 years, even at the lower end probability. I am conscious of time, Presiding Officer. I would just like to touch on one other point, which I do not think has been mentioned, that the Westminster Librar Government brought in an early initiative in 2000, the introduced lift, which is the licence information for trading, which encouraged smaller companies, with lower overheads, to swap licences with large multinational companies to encourage development, because, currently, there are between 80 and 180 undeveloped fields, and the UK bloc leasing terms do not always encourage companies to maximise development. That leads to the whole issue of fallow fields, which I think is a real problem. Finally, Presiding Officer, in a few seconds left, I believe that the oil and gas sector is crucially important to the Scottish and UK economies for employment and industry security. Historically, of course, it has been volatile, cyclical and will be heavily influenced by production decisions taken in Raiad, Moscow and Washington. Nevertheless, if the industry continues to adapt, learn and be flexible, including the establishment of resilience fund, we can all be confident if a dynamic oil and gas sector for generations to come. When we are looking at the motion today about the future of the oil and gas industry, we have to say that, with the focus being so far on Aberdeen and particularly in the North Sea Basin, we are missing the bigger picture, which some people have mentioned such as Tavish Scott and, to some extent, Dave Stewart. I think that we have got to recognise that there are an awful lot of people who are involved in the industry, both in the oil and gas industry and developments from it, who deserve our attention today. I want to turn my attention to some of those. I welcome very much one or two of the suggestions in the N56 5-point plan that was issued today. Those are about relocating key decision makers, Government policy and decision makers that are responsible for oil and gas taxation and regulation from London to Aberdeen. We can see in another area that I am interested in in the renewable sector that the necessity to have that movement to where the action is is one of the things that Government can do better. If this is a united kingdom, then that should be no difficulty at all because it is one of the ways in which the UK can show that it has a commitment to the North Sea that it could do as well as deal with exploration taxes and the like. In looking at the way that the development of oil and gas has gone, we have to recognise that there has been quite a lot of investment, which other people should know about in areas such as my constituency in the Cromarty Firth on the north coast at Scrabster. Tens of millions of pounds are invested in the Cromarty Firth port authority. A port authority, which is now called itself port of Cromarty Firth, says that it is the UK's premier port facility for IRM work, with dedicated berths and mooning facilities adjoining hard-standing and heavy lift crane pads. There have been 650 visits of oil rig platforms for servicing in the Cromarty Firth, so that is a big part of the job of actually getting the oil out and keeping the systems going. At the same time, people like global energy on the Cromarty Firth and in other places have been supplying subsea and topside equipment to operators, so it is not just places such as Aberdeen, which have had a major part to play in the North Sea and beyond. I should say at this stage that it is important to recognise that that Government investment was made there to ensure that this industry can develop. Tavi Scott mentioned west of Shetland, particularly the large gas fields, which involve £3 billion of investment in the future, which are a huge and important driver of the economy. When people talk about a crisis in the North Sea, you should recognise that there are parts of the oil industry in Scotland that are very long-term projects that are developing and continue to do so. A little snapshot of that is the fact that WIC, Johnna Grot's airport, has had its highest number of passengers in the last month ever, and they are working on from there to west of Shetland, so we can see in parts of this country that indeed the developing parts of oil and gas are actually providing jobs, developing those both in Shetland and on the mainland. That is an important point to this whole argument. That is the second one about Aberdeen. Lots of our people from Caithers fly there every week to work. Land is much cheaper in the north of Scotland than in Aberdeen. It is important that the strategy for the future involves spreading out the benefits of the firms that work in Aberdeen to provide cuts in the costs for them to deliver for the future of the oil industry in the future. That is why we have to broaden out that particular debate at the moment. That is why the issue about the Norwegian model is so important, because the long-term strategy that it involves looks at the various parts of Norway, not just a small part. I just like to look first, certainly, minister. I think that Mr Gibson makes an extremely good argument, Presiding Officer. Does he also agree with me that the energy north task force that I co-chaired has been a very good means of ensuring that we fully use resources, people, businesses and places such as its constituency and other parts of Scotland to spread the benefit of the industry beyond its centre and hub in Aberdeen and Aberdeenshire? Rob Gibson. I do indeed, Presiding Officer. I have to say that it is important that we make sure that Aberdeen works and that there is investment there. It is also essential to the future of the industry that we recognise, that the west of Shetland is part of it and perhaps the Atlantic Rim, who knows. However, I would like to turn, Presiding Officer, to a point about the way in which oil and gas are used. First of all, remind ourselves that there are many transferable skills that are available to us in the oil industry. Some of those were demonstrated by the use of talisman, of the development of offshore wind at the Beatrice platform. We need to have a serious look at the use of oil and gas so that it is a feedstock for the chemical industries, but as we reduce the use of oil and gas for fuels, we are actually using them well into the future. I would like to see more of that thinking come into things. I have to say also in terms of the Norwegian model that I have to look at some of the things that it does about skills development. It makes sure that many of its nationals get a chance. It does not allow so much of the subcontractors to employ people at the lowest level of pay in too many places and that many more local people have a chance to actually get jobs. I would like to see the energy skills investment plan looking carefully at that particular matter. Above all, it is important to recognise that, although most people in here want to see the development of oil and gas into the future as an employer and as a transition industry, when the UK Government put on the supplementary charges on four occasions, it was Alistair Carmichael, John Thursell, Charles Kennedy and Danny Alexander—those are people who voted for those supplementary charges and who are fighting against the interests of my constituency and every other part of the Highlands. I have to admit that when I see topics like today's for debate on our business papers, my heart sinks just a wee bit and I know that I will have to dig deep to summon up the energy to even bother getting to my feet. I have to say that Rob Gibson's contribution a moment ago gave me some glimmer of hope that there is at least a recognition that this debate is coming to its end, that this period in human history, this blip, this aberration, this tiny little period in human history when we shunted the world's energy systems into reverse is coming to its end. Every one of us in this chamber knows what happens to a community and to an economy when an industry that it has been over-reliant on goes. Every one of us knows that that is going to happen to this industry. We may disagree about when or how quickly, but every one of us knows that this industry is not going to last forever. Every one of us knows that none of us are doing enough to begin to chart a long-term transition, a real future and we see instead a disagreement—I will make some progress if I may—about whose responsibility it is to manage better the same basic policy between Scottish and UK Governments, which is maximum extraction. Why are we not talking about the policy that is going to have to come after that? Why are we not talking about how to manage the transition away? Why are we not talking much more substantively? Yes, about the opportunities for decommissioning. Yes, about the opportunity for transferring skills into the renewable energy industry and into developing a wider range of non-petrochemical feedstocks so that we do not have so much of our economy, so much of our lives on a daily basis ever more reliant on this finite commodity, just as our economy is currently over-reliant and overexposed to it. I am grateful, Presiding Officer, for Mr Harvey giving way. Can I just ask if he could clarify? Is he concerned about the fate of the people who face redundancy at the moment and does he agree that all of us in whatever party should do everything we can to minimise and avert further redundancies in the oil and gas industry? In my opening remarks, I made it clear. I said, we all know, Scotland knows what it means, what it does to an economy and to a community when an industry that it is over-reliant on goes. We should all of us be concerned about it. If you stop baracking, then maybe I might. Everyone of us knows what happens to people who are over-reliant, but the worst thing that we can do is dig ourselves ever deeper into that hole, leaving ourselves ever more exposed to that vulnerability because the oil and gas industry, the fossil fuel industry, let's remember, is valued according to its reserves, is valued on the basis of an assumption that all of those reserves will be turned into profit. One more thing that every one of us knows, at least anyone who has bothered to find out, is that that won't happen. The world has far more fossil fuel than we can afford to burn if we are remotely serious about handing on to the next generation not just a viable economy but a viable ecosystem in which they can live, not at the moment. If we are remotely serious about that, then the world has far more fossil fuel than we can afford to burn. What we are looking at is an economic bubble, an industry that is profoundly overvalued. Our economy, Scotland's economy, is overexposed to that vulnerability. There is an alternative to this single policy objective that unites Scottish and UK governments of maximum extraction. Aspects of it are not so far away from what we have heard about Norway because, in Norway, what we have seen is far greater revenue coming in to the public plus per barrel of oil. Just over the six years or so prior to 2008, the UK lost out on something like £74 billion of income if we compare the UK level of revenue coming in with the Norwegian level of revenue coming in. The opportunity that we have is not to maximise long-term extraction but to maximise short-term revenue and use those revenues to fund the transition away from the industry. Every one of us knows how dependent all of our lives are, every day of our lives, not just those who work in the oil and gas sector, but particularly those in the north-east of the region, but not just them. Every one of us knows how interdependent every aspect of our lives has come to be with hydrocarbons and every one of us knows that it is going to end. One day, perhaps not very long from now, somebody living with the consequences of the decisions that we are making now will look back at this report, read the words in this debate, they will read the words of Fergus Ewing when he said that inaction is not a rational option. Let's not earn the scorn of that generation by our inaction, because that and afraid is what everybody knows we're doing now. Thank you very much. I now call Christian Allard to be followed by Richard Baker. Thank you very much, Presiding Officer. I'll follow into Patrick Harvie and I was a bit surprised by the tone of his contribution. He seems to be very, very angry, but I think that he's angry as a wrong place to the wrong people. Of course, we all will want to do that to make sure that all that money had been invested correctly over the years and will not be scondered by the successive UK government. Of course, we would want them to be invested in renewable energy. It's what we call for, it's what this minister calls for, what this Scottish government always calls for. Unfortunately, it's not in our remit in this Parliament, so I do understand how angry he is, but I'm just putting out to him he's maybe angry to the wrong people in the wrong place. I'm delighted to speak on the Scottish Government debate because action is needed and it's needed now. This is very important, but there's nothing new into it. We heard it over the years, so what are we waiting for? Why does the Scottish Government, as established as the Energy Job Starts Force, headed by Lina Wilson of Scottish Enterprise, this task force is both to maintain jobs, which is very important for the North East Scotland and to mitigate the potential impact of any losses following the whole price drop? It's important to understand if there's jobs lost and more position lost. A lot of us people have already found another job because we are highly, very, very qualified and I spoke about that subject in the chamber before and I like to repeat it and to point it out to the minister. What we have to be careful is that all these people, whatever they are, they are from the North East who came to the North East to work. I've got a lot of expertise, but if they have lost their position, we are very, very likely to go and work somewhere else, particularly abroad in other oil producing countries where the tax regime is very, very different. So it's very important to understand that job losses and not automatically thinking that's a person we'll have no job to go to, but it will mean a relocation of those people who have acquired a lot of skills over the years. So what's important as well is to understand that the North Sea itself could easily buzz for another 50 years and I know that Abish Scott talked about it and that you could have read it in the PNG energy supplement this month. It's a very good read and I will encourage any members who wants to know more about how we react to oil prices or how we react to the induction of the Westminster Government to read that supplement. The Scottish Government has called on Westminster to reform its fiscal regime since 2011. What are we waiting for? Let me be clear, it's not about tax cuts presenting officer, what we want and what the industry must have is a reversal of the tax hike imposed on the industry by this UK Government in 2011. I welcome the oil and gas UK 2015 activity survey published on 34 February. I wish some people from the Labour branches, the Conservative branches would have read it because if they had read it, they would have seen the forward world from Malcolm Webb. We still chief executive of oil and gas and by the way Tabish Scott is not in the Chamber but I would like to welcome Deirdre Mickey to a post as well and there is a motion which I put at Parliament so anybody who wants to sign it will be very welcome. What's forward Malcolm Webb was is a permanent shift to a lower and simpler tax regime is now urgently required to allow investors to shift their focus away from fiscal risk and towards investment opportunities in the UK continental shelf and which there still remain a significant number. It's that we have to understand, its opportunities presenting officer are of a significant numbers while a shift to a lower and simpler tax regime is urgently required. What's not to understand and really we don't understand why Westminster is still not listening to what the industry has been telling them for years. So here we are, the sector is implementing the wood review recommendations, why the Westminster government is doing absolutely nothing. The UK government accepted the recommendation, what are we waiting for and all in gas UK answer again would are not alone beating the drum for the nofist economy. Here is what the members of the multi award winning Chamber of Commerce of Aberdeen and Grampian had to say in the recent survey when asked what the UK's government's top priority should be for the oil and gas sector, 60% of respondent identified revision of the fiscal regime to encourage exploration and extraction as the most important issue for the UK government. This is not the SNP or the Scottish government asking, is the sector. The sector is asking and nobody is listening. Neither the Westminster government, liberal, democrat and conservative coalition, who's the opposition or Westminster, the Labour opposition, they are not listening. I don't know what we are waiting for, President Officer. Let me thank, by the way, Rachel Elliott, the Chamber's policy executive for the briefing. The second most common view in this Aberdeen and Grampian Chamber of Commerce survey was the development of a new strategy for maximising economic recovery, which was identified by 17% of funds. Here we are, President Officer. We have once again established that the industry is calling for reversal of the tax hike imposed on it by Westminster Revolt consultation. We know that members of the Aberdeen and Grampian Chamber of Commerce are calling on the UK government to stick to its promise of reversing the North Sea Oil and Gas tax hike and to maintain fiscal stability. We are all aware that industry experts think the North Sea Oil and Gas industry can buzz for another 50 years with the right fiscal regime. If I can finish on something, President Officer, is to welcome all these new people in post, Lena Wilson, of course, who is now heading the task, the job task. We've got David Remicky, who's going to take functionary oil and gas UK on the 1st of May. Rachel Elliott, who's providing the briefing from the Chamber of Commerce. And of course, Jenny Standing, who is an external affairs manager for oil and gas UK, and the secretary of the cross-party group. All those women in the oil and gas industry is very, very important. I would like to say to the minister and make a plea to the minister, let's think about the future for the men of women of the North Sea of Scotland. Thank you. Excellent. Many thanks. No call on Richard Baker. Do we follow by Alex Johnson? Thank you, Presiding Officer. This debate is focused on issues regarding taxation in the oil and gas industry. As a member for the North East, I'd be the first to acknowledge the sharp drop in the oil price that requires a different approach to be taken on taxation. It's vital to protect investment and production in the North Sea, and it's crucial for jobs in Aberdeen and the wider North East. That's why, as pleased, Aberdeen City Council hosted a summit on oil and gas in February, and that both Ed Bowls and more recently Gordon Brown have made clear that the Government does need to implement measures on tax to boost the industry in East Africa at times. I'm somewhat surprised, though, to hear SNP members so extolling the Norwegian regime for taxation, given that many of the fields in Norway are taxed far, far higher than is the case by the UK Government and UKCS. There's a certain lack of consistency there. I think that members in those benches have talked about the exploration tax that Norway put in place in 2005, which has been hugely beneficial. As I said, it's seen a four-fold rise in drilling. Does Mr Baker support that exploration tax? It seems that his colleague Mr McDonald does not. We've made absolutely clear that we want to see measures to incentivise exploration, but it's funny that Mr Stewart fails to refer to the fact that some fields in Norway are charged from 20 per cent more than fields in the UK and are neglected to talk about that in the wider measures regarding exploration and other issues, which are important. We need a little bit of balance in terms of the way in which that's presented. However, while the issue of taxation is of the utmost importance in my contribution, I want to look at other areas of policy that affect the industry and we're actioned by the Scottish Government in particular, and by our local authorities as well could bolster oil and gas businesses at this crucial time. There's no doubt that they're hurting at the sudden drop in the oil price. Of course, oil and gas workers are hurting, too, with thousands losing their jobs. Yesterday, I met the leadership team at Amec Foster Wheeler, who employed 3,000 people in Aberdeen and Oshel delivering brownfield and asset management services to the industry in the North Sea globally. They made clear the importance not only of changes in taxation but of reducing costs as well. Of course, exercises in cost reduction often impact some staff. I'll return to this issue later on my own views on how that impact must be minimised. However, one area of concern that they had was the cost of doing business in Aberdeen and Scotland more generally. They've got offices across Scotland and so improved a more efficient transport links from Aberdeen to the rest of the country would help to reduce costs, as would improve transport links with Aberdeen itself. Amec is based in the south of the city, but, like oil businesses in the north of Aberdeen, they face problems of congestion as well, and that's a drag on the efficiency of their business and of their workforce. Of course, hopefully the western peripheral route will alleviate some of those problems, but there's no doubt that investing in Aberdeen's infrastructure in a comprehensive way is required to bolster the North Sea and ensure that the city is, in the long term, a hub for the industry. Investing in the city, its infrastructure and affordable housing is of even greater importance to the industry at this time. That's why it's vital that the Scottish Government gets behind Aberdeen's bid for a city deal. The Aberdeen city region deal has been referred to by a number of members and it aims to release £2.9 billion of funding in infrastructure, and that's vital not just for the city region but for the oil and gas industry, as well. Malcolm Webb, who is indeed still in place at this moment in time as chief executive of oil and gas UK, made this clear when he said that Aberdeen city and shire requires investment in its transport, commercial, housing and communications infrastructure on a scale beyond the finances of the local authorities. Without that investment, the greater Aberdeen area could limit the future development of the UK oil and gas industry. It's these kinds of developments that need to be pursued to stimulate the industry and make it more efficient. Another important area is the need to reduce wasteful duplication in the industry and, as our motion puts it, the need for increased collaboration and sharing data. Trade unions have made the case that, rather than cutting jobs in terms and conditions, a focus on greater co-operation in the industry will drive increased efficiency. As Unite and others have pointed out, it is absolutely crucial that, at this time of the talk of the need to reduce expenditure, health and safety must never be sacrificed for the sake of cost, as we are all too aware of the toll that has taken in the industry's history. I have brought forward two member's bills that should the operation of Scots law would encourage employers to have a rigorous approach to those matters. We must all remember that, in the recent report by the Civil Aviation Authority on Helicopter Safety, concerns over the impact of sudden cuts in the terms of contracts were raised. The final area that I wish to speak about is indeed exploration. Of course, this is an issue that Gordon Brown has highlighted the importance of in his recent contribution to the debate. When I met Akker, he emphasised that the greatest challenge they face is not actually now or tomorrow, because even though a number of projects have been cancelled, there are still a good number of projects that are being developed. Their concern is post-2017, because of the lack of drilling and exploration now, which was highlighted in the UK oil and gas activity report, which I did indeed address. The industry is clear that action to incentivise exploration is essential, and I hope that that is a message that the UK Government will take on board. That is called for action from UK ministers and the tax regime, and to ensure that, on training, on skills and infrastructure in the north-east, Scottish ministers play their part in supporting the oil and gas sector at this crucial time, and in doing so enable our local authorities in the north-east to do all that they can for this vital industry for Scotland as well. Many thanks, and I now call on Alex Johnson to be followed by Stuart Stevens. The situation in the north-east is one that reflects the oil price. The oil price is volatile, and we can never be entirely sure what it is going to do next, in spite of the fact that, in relatively recent times, we have had one particular politician who liked to look into his crystal ball and make wild predictions for the future oil price. We now know, if we did not know before, that that cannot and cannot ever be done. Where we are today is one week before the budget, a budget in which we have high expectations that the Chancellor of the Exchequer will deliver on behalf of the industry. I have no doubt that he will. However, we have had a range of discussions today, which indicate just what people will not and what they are prepared to settle for. Sadly, we heard from the minister in the first speech in this debate, when he opened the debate, that successive Governments need jerk changes to the tax regime have done the industry no good. The problem is that the proposal that he brings forward seems to be me to be, to some extent, another need jerk change to the tax regime. What happened in last year, when the oil price was beginning to decline, was that the Chancellor of the Exchequer took the opportunity to make a 2 per cent cut across the board to the supplementary charge and enter into a full consultation with the industry to discuss what was necessary to best achieve the objectives that that industry shared with Government. No, thank you. The objective of that consultation is to ensure that we get a regime that will reflect the needs of the industry. However, we have heard a number of things said today that give me some concern that we will not get the complete picture if he listens to people in this debate. Now, a lot has been said about Norway, and comparisons with the experience of Norway and its North Sea oil and gas production and ours are viable in some cases, but unfortunately not always. In fact, it could be said that the experience of Scotland, a bleak UK and that of Norway have been different most of the time and are currently particularly divergent. However, it can be said that the grass is always greener on the other side of the median line. We have seen from the Government today the old habit of picking mix, choosing the bits of Norwegian experience that they think is good and ignoring the bits of Norwegian experience that they think is bad, as was pointed out by Richard Baker in the previous speech. Let me make some more progress. If we take specific demands that are being made, tax relief to encourage exploration, that is always a good thing. I am sure that we can all agree on that, but the experience between Scotland and Norway is different. Scotland's area for exploration is geographically constrained to some extent, with the exception perhaps of the extreme north-west and the particular hostile conditions that we have there. Meanwhile, Norway continues to explore further north, up its coast and into the Arctic Circle, an almost unlimited range for that exploration drilling to take place. Therefore, a different effect could be caused by encouraging that exploration. There is more to find. On the subject of drilling, what we need more of in the North Sea during this depression is the standard run-of-the-mill everyday development drilling that goes on on existing reserves. The problem that we had the last time oil prices hit rock bottom was that drilling was scaled back on existing reserves. The effect was that five years down the line yield from those existing reserves was lower than it would otherwise have been. It is essential that we also include opportunities to give tax concessions to companies who will continue to drill on existing reserves, not only exploration drilling. I accept the last point that drilling within existing fields is important, but so is discovering new reserves. Does he agree that one of the benefits from the Norwegian tax credit of 78 per cent was that it actually yielded, according to Wood McKenzie, an additional $4 billion of tax revenue? It was actually a cost-effective measure for Norway. I agree, but the differences between us and Norway come to the fore once again. The fact is that we already know where a great deal of our oil reserves are. They have been explored and discovered previously. The situation that we find ourselves in, as was developed by Lewis MacDonald in his speech, is that some of those fields have entered production and are currently seriously unprofitable or worse still. We know where pockets of oil and gas exist, but they simply are not viable at the current level of taxation and prices. What we need is a system that is designed to acknowledge that we know where the reserves are and try to bring those reserves into production. The tax regime must deal with that if we are to extend the life of our industry. When we look at taxation, there is an impression given that somehow any cut in tax is government giving money away to huge international companies. Let's never make the mistake of thinking that this is a tax giveaway. Those are companies that already pay levels of tax that would make the pipsqueak if we tried to enforce it as an income tax level. Those are companies that have yielded enormous amounts of tax to the UK exchequer, and here in Scotland we have benefited massively from that. What we are talking about is reducing tax a little to make our industry more viable in the future, to give us the opportunity to extend the life of our industry and take it perhaps to new heights. The minister asked for specific suggestions of a positive nature. I know an industry in the north-east of Scotland that is perfectly well-equipped to tap the 83 trillion cubic feet of gas and the 6.1 billion barrels of oil estimated to exist under Scotland on the onshore capacity that we have. Let's have a Government that might look positively at developing that in the near future. Interesting debate and some measure of agreement. I will start off by putting a slight olive branch out to Patrick Harvie. It is quite clear that crude oil has been vital for transport for the past 100 years, but it is equally clear that, well under the next 100 years, we will have, because we will have had to, wean ourselves of crude oil playing that particular role. However, oil will remain of substantial commercial value. It will remain central to developed economies around the world, not, however, as a fuel for transport but as a chemical feedstock. The progress that we have made in trying to replace crude oil as a chemical feedstock is substantially less than the progress that we have made in replacing it in transport. One of the challenges that we have, I will do. The member makes a very fair point. We have made a lot less progress and we need to in replacing hydrocarbons for all those other uses. Is he really suggesting, though, that the already high prices that are being spent on extracting, the high cost incurred in extracting ever harder to reach oil, will be viable once fuel is no longer a legitimate use for those substances? That will play out the way it plays out. My balance of view is that the price of oil will continue to rise and we will continue to find that it is for some time to come the most economic solution to many of our needs. However, we will have to divert investment into finding out how to replace oil as a feedstock, but it will take a long time. Some things are going to happen technologically that will help all that. One of which is communications will improve, we will have video conferencing via hologram that is essentially going to be just light sitting in the same room. We will travel less for fewer purposes. Yes, we have got to reduce our consumption of non-renewable material, but we will find that the technology will help us do. Now, it is not easy to look forward. Churchill said—I do not think that he was the first person to say it—that prediction is difficult, especially about the future. We certainly know that there will be a $100 barrel in the future. We certainly expect there will be a $200 barrel in the future, and we should not be surprised by a $300 barrel in the future. However, there is nobody here who can tell us when any of those will happen with any certainty. If I could work out when it was going to happen, I would end up a very wealthy man indeed. The uncertainty is not so much in the pricing, the uncertainty is in the timing, and that is precisely why, in what one might term economically good times in the oil industry, we must store up the nuts to feed us through the bad times. That is what works. It is worth saying that Norway is too—a proportion of Norway's GDP that is down to the oil industry is more than two and a half times the proportion of the Scottish economy. It is very different, and yet the pain that they are experiencing is now because they have stored away the nuts in an appropriate way that a squirrel will do to prepare for winter, and they are able to ride over the difficulties. Michael McMahon quite properly highlighted the dangers of overreliance in one industry. Indeed, the first law of epigenetics is that the more highly optimised organism is for one environment, the more adversely it will be affected by changing that environment. There is an intrinsic value in diversity rather than in specialism, although specialism gives you great short-term benefits. Now, Michael has spoiled it a bit by saying that Norway has no motorway system. Obviously, it has not been there. Yes, that is true, but it has the most wonderful ferry system, the most wonderful network of regional airports that get people around that is related to the geography of Norway. I know that very well because my niece stayed in Norway for many, many years, but the real legacy of oil is not actually this black stuff coming out of the ground. Fifty per cent of the value that we get from this industry is actually in exports, not exports of the oil but exports of skills of talent and the reservoir of skills that there is in our communities. In Scotland and the north of England and beyond is very substantial indeed. The N56 report suggests that Brazil will be spending £250 billion in this industry over the four years from 2013 to 2017. Indeed, Scottish Development International in a report only this month says that Scotland is widely admired around the world for its expertise. The resilience fund that we have heard about, it is about drawing the nuts that we put down in the good times. The trouble is that the oil would not be paid for the resilience fund when it is precisely the thing that should be. I declare my membership of the institution of engineering and technology. When I talk about engineers, we have huge talent and skills but we do not recognise them properly in a professional way. The Germans elevate engineers to a much higher social standing and give them much more academic support. We have probably got to do the same. Our engineers can develop oil elsewhere, offshore construction in wind and tidal, engineering projects generally, extraction of water is increasingly going to be important. We have the skills, the talent, and the value of our industry has been drawn from offshore to onshore. It now lies in our people. We are going to make sure that we support them. Many thanks. Thank you, Presiding Officer. Few subjects attract misinformation, misunderstanding and assertion as this one does. We should remember that the UK oil and gas industry has proved mana from heaven in contributing to Britain's economic wellbeing for decades. The output from oil and gas industry amounts to somewhere around 10 per cent of Scotland's GDP. We know that production levels have from the North Sea been in decline for over a decade. Given the nature of the business in the North Sea, the oil and gas industry's future relies on technological innovation as well as new discoveries. Certainly the last BP briefing that I attended in this Parliament oo's confidence in regard to the future based on those elements. The recent downturn in the oil price has had some positive effects for industries associated with the oil sector, such as food stocks, cosmetics, tyre and petrochemical industries. There have also been some welcome respite from high fuel costs for motorists and haulage groups. The geopolitical situation, however, affects Russia, Europe and the Middle East. The reduction in demand for services that has resulted from the global economic downturn of the past several years combined to ensure volatility in the oil price for years to come. It is evident that short-term planning has not worked. The SNP Government has been in power for eight years now. Given the importance of oil and gas industry to the Scottish and British economies, I would have expected that the Scottish and British Governments to have developed a contingency plan ready to implement in the circumstances that we face now. Every well-run business that I have encountered devises a risk register, designed to list those elements that could logically affect our business. With oil and gas amounting to over 10 per cent of our GDP, I would have expected volatility in prices to come high on Scotland's priorities on such a register. Much was said last year by the nationalists about Scottish Labour's supposed assertion that Scotland's oil reserves were in some way a curse. Today we see that our only point was that oil and gas is not simply a benefit to our nation, but it presents a potential problem if we depend too much on its bounty. We now face the responsibilities arising from the plunge and barrel prices, with more than £6 billion wiped off tax revenues generated by North Sea production. If the minister agrees, he should tell us when the risk assessment was drawn up in this regard and how often it was revisited. What steps has he taken to prepare Scotland for the eventualities that we face now? Is the current situation on a register at all, or did the Government presuppose that the price of oil would remain a long-term upward movement? It seems to me that the one proposal that the Government has played out for us today is to demand that the UK Government take action in areas of tax cuts and jobs transfer. I agree that the UK Government has much to do. It has not done enough, but we also need to know precisely what has been implemented by the Scottish Government to meet the dangers created by the new reality. It is not enough to suggest that it does not have enough powers in this place. Last year's referendum reflected the public's view on independence. An effective response deals with the range of available options to ministers and to the army of civil servants and experts. What options were put before the minister and what options has he decided to implement? Surely the task force that is much welcomed, the website and support—whatever support means in the round—is all to be welcomed in the current environment. However, what additional actions is the minister able to declare that will assist the area and region around Aberdeen and communities across Scotland who rely on this important industry? Lewis MacDonald has called for a contingency fund to be created to meet challenges associated with the sudden industrial downturn of all kinds. The recent collapse in oil price and consequential economic impacts on the north-east is clearly such a challenge. He has been derided by the SNP group for having the audacity to ask the Scottish Government to take meaningful action. What will the minister suggest in its place? The N56 suggestion of shifting a few key jobs from London to Aberdeen seems to me tokenistic in the circumstances. Most of the global players resort to London to implement transnational business decisions. Moving Offices ignores the modern convention of technological support, which was referred to earlier, as well as the conferencing so prevalent in global business environments. We face a change in circumstances that could deliver structural damage to our economy for the years to come. Urgent action is required from both UK and Scottish Governments, just as Mr Ewing indicated, together working in harmony. Serene Wood's review made significant recommendations, including setting up a new regulator, revitalising exploration, ensuring that operators maximise economic recovery, etc. Has the minister in his considerations of the risks involved decided to implement the recommendations that fall under devolved powers? Is the minister prepared to consider public private funding of exploration and production at this time of financial stress? People across the country—particularly those who work daily in the oil and gas sector—deserve to know what the Scottish Government is to do from today forward. Thank you, Presiding Officer. Yesterday morning, I spent two hours talking to a small precision engineering company in Ayr. It is one of the many key and smaller members of the supply chain to the oil and gas industry. It is, of course, concerned with what it sees as its current prospects in the industry. That, of course, is not helped by any ill-informed commentary by some of our principal opposition in this Parliament, not just to the current situation but to its on-going prospects. It is a challenge that I believe that we can meet. Just as I charged the Labour Opposition in last week's economic strategy debate of being devoid of any forward-looking capacity that I do in this debate, that is compounded by the supine approach of the Chancellor of the Exchequer and further compounded by the revolving door approach to the appointment of 35 energy and Treasury ministers given responsibility for the oil industry in the last 14 years. How on earth can you manage a major asset like that? As Kevin Stewart pointed out, Professor Alex Russell indicated that the UK Government is now playing politics with the future of the Nazi oil industry and that it is the pace of change for the industry from Westminster because of mismanagement has been just dire. Of course, the Chancellor is no rabbit caught in the headlights of an existing crisis. Rather, he will pull a rabbit out of the hat in his budget next week. He is not alone in creating illusions. His bedmate is the leader of the Scottish Labour Party, the emperor with no clothes, again boring hours when necessary. On 6 June 2009, Jim Murphy, for it is he, said an oil fund, quote, is not a viable choice for Scotland. He pressed O. He now calls for a resilience fund when the oil price has dropped to $50. Just for information at 1.30 today, Brent Crude stood at $59 a barrel. In 2008-2009, when oil prices dropped from $144 to $40 a barrel, that is $40 a barrel equivalent. When he was Secretary of Scotland, no mention of a resilience fund, of course. Does Mr Brody recognise that, although there have been previous faults in the price of oil, current circumstances are quite different from those previous occasions because of the position of marginal fields in the North Sea? There may have been different circumstances, but that just indicates what happens when we have the volatility. I answered how we could handle that earlier on. As for the Sorcerer's Apprentice, Ed Balls, as Energy Voice reported on 21 January on visiting Aberdeen, I quote again, he refused to be drawn on the specifics of Labour's plan for the oil industry. No strategy, no plan. In this theatre, not of magic but perhaps tragedy, a headline act of no economic strategy and a follow-up this week of no plan for Scotland's greatest asset. However, let me help them. They criticised or criticised the forecast price of oil made by the Scottish Government last year. However, of course, as I mentioned earlier, no mention of the OBR forecast of $100 a barrel through 2019, which underpinned the Chancellor's last autumn statement. However, let's leave the magic and illusions aside. As I pointed out, we've been here before in 2008-2009, with the price of oil dropped by over $100 a barrel. Today, yes, we have a challenge that we have to face. This morning, I looked at the WTI, West Texas Intermediate, forecast and the Brent Crude oil projection and looked at the forward view of prices. The WTI said that its price today was $52 a barrel. For August 2015, it said that it was $73. Brent Crude, under the long forecast economic agency forecasts, stood at $59. In March 2016, it is projecting an average of $79, and so it goes on July 2016, an average of $110 a barrel. We just underpins the volatility, which requires a different kind of management of today's challenge, which is why the Scottish Government has, rightly, set out its policies and its strategy for the industry in the short term to maintain the apprenticeships and to maintain, as best it can, the jobs through the energy jobs task force. Then, calling on the UK Government to reverse the iniquitous 2011 supplementary charge, to amend and adjust the criteria for investment to address the many challenges facing the industry in which the industry will meet, not just the industry in terms of those that are at the front end but the supply chain, and so develop incentives for deep-sea exploration. Of course, we support the need for industry to, in the current circumstances, rationalise its costs. It is right that it looks for efficiencies, and over the years, there may have been inefficiencies that now have to be eliminated. However, all of those development opportunities can, I believe, be exploited by the current working group. For example, on the Clyde, the West Coast, Clare Ridge, Western Isles and new opportunities in the future. Never in business have I seen such an asset that did produce $17.7 burden by complexity in taxation, exploited as price rises, create the oil fund that we have asked for, create the jobs, particularly for our young men and women engineers, and please, to the UK Government, do not smother the industry ever again. I am glad to have the chance to speak today in a debate about oil and gas, which are without doubt some of Scotland's most important natural resources. Thousands of jobs in my region of Miss Scotland and Fife rely on the oil and gas industry, both directly and indirectly, through manufacturing and supply of components that are vital to the sector. That means that the crisis in Scotland's oil and gas industry is a real concern to hundreds of local families. Macaulay Clare Baker has previously raised the 170 potential job losses at BiFab in Metho and Burnt Island. The low oil price is a factor in BiFab's future prospects, and there is huge concern in those communities at the current situation. We must do all that we can to save and protect local people's jobs. In the minister's response to the debate, I would be grateful for an update of further action that the Scottish Government has taken to intervene and help to save those jobs, as well as to help to secure a sustainable future for a fife energy park. I am sure that it was Baxter that myself and Scottish Enterprise are fully engaged with BiFab with Mr Robertson, as I mentioned to the chamber. Does she also recognise that companies such as FMC and Oceaneering, whom I have met on more than one occasion in Houston and here, make a tremendous contribution to the fife economy because of the high quality of the work that they do in the sub-sea sector? We need a complete assessment of the true impact that low oil prices have on employment and the economy across the whole of Scotland. I would have thought it essential for the ministers to arm themselves with the full facts so that they can respond thoroughly and effectively. I can understand the political reasons why the Scottish Government may be avoiding this, but the need for an understanding of the real impact on the life of Scottish families has got to take priority. I pay tribute to the way that my Scottish Labour colleagues have reacted quickly and decisively to the crisis that has hit the oil and gas sector. I must express my surprise at the terms of the Scottish Government's motion in asking us to agree that it is doing all that it can and that the onus is now solely on the UK Government to act. That is not our position at all, and I urge ministers to consider the ideas that my colleagues have set out in their contributions this afternoon. We must use the powers that exist in this Parliament to do everything we possibly can to help the people who have lost or at risk of losing their jobs. It is just not good enough to sit back and look to Westminster. Now that the Government has acknowledged the scale of the crisis in Scotland's oil and gas industry, I would suggest that there is, in fact, much more that it can do. Scottish Labour's call for a £10 million resilience fund would provide an instant source of support for areas that suffer a sudden economic shock, like the communities that are currently affected by the oil and gas crisis. It would provide local authorities with an immediate pot of funds to offer assistance to local businesses and those facing redundancy. Gordon Brown has also called for the establishment of a North Sea Reserve fund, which would see companies and Government investing in the future on the basis of partnership, working together to secure better prospects for the industry. I urge the Scottish Government to consider those and other ideas that would help to make a real difference to people who are worried about the future. Oil is usually important to our economy, but the folly of placing too much emphasis on a finite and notoriously volatile resource continues to be exposed. For decades, the Scottish National Party has been overly reliant on oil as a way to fund economic plans for our nation. I am keen to look to the future, however, it is impossible not to look back to some of the economic mistakes that they made in the referendum campaign. Alex Salmond was fond of lambasting many of us who support the union for treating oil as though it were a curse and not a blessing. We were told that we were talking Scotland down in refusing to accept that oil could be the funding source for an abundance of different spending proposals in Scotland's future. It is not Scotland that is cursed, but the SNP's economic plans, when they are based on resource whose value has almost halved in recent months. A barrel of Brent crude is today worth less than $59, whereas the SNP based its plans on a price of $113 a barrel. Even in December, John Swinney was still basing parliamentary answers on an oil price of $110. Scrapping the Barnett formula and relying on oil as the SNP wishes to do with its election platform of full fiscal autonomy is yet another grave error. The Scottish Affairs Committee has today confirmed that this would see a £6.5 billion black hole in Scotland's budget, more than half of the NHS budget in Scotland. That really matters, not because we are having a political debate here in this chamber, but because the livelihoods, prospects and futures of families, companies and communities across this country rely on the Scottish Government to get in their sums right. That is about funding for our hospitals, our schools and our pensions, so as well as reconsidering its own economic plans, I urge the Scottish Government to look again at the action that it can take to make a difference to our oil and gas sector, to the companies that are struggling, their workers with jobs at risk or terms and conditions being squeezed, and to communities that are being hit. This is a time for ministers to act without delay. I now call on Gordon MacDonald, after which we will move to the closing speeches. The oil and gas sector, despite its current problems, is still an important industry for the UK, whether it is in relation to employment, public finance or the UK's energy needs. The oil and gas strategy group 2012-2020 report produced by the industry leadership group highlights that the industry supports employment for 440,000 people across the UK with 200,000 jobs in Scotland. Of this UK total, there is an estimated 240,000 employed directly by the oil and gas companies and the wider supply chain. Although there has been a reduction of jobs in the North Sea since the report was published, Opito, the skills organisation for the oil and gas industry, estimated in December that there are 12,000 vacancies for new entrants to join the offshore workforce in the next five years. Oil and gas companies realise that they have to invest in the next generation, and therefore 86 per cent of those companies have in place across the UK programmes that support 6,000 graduates and 13,000 apprenticeships. The sector currently provides one in 80 jobs in the UK. When it comes to public finances, the oil and gas sector is responsible for almost 20 per cent of the corporation tax that is paid to the UK Government. The UK's checker has received an excess of £300 billion over the past four decades as a result of 42 billion barrels of oil being recovered from the North Sea. Of the top 20 oil producers, only the UK and Iraq do not have a sovereign wealth fund. Then there are the UK's energy needs that are predominantly met from North Sea resources. Nearly a fifth of electricity generation is dependent on gas turbines. Almost all of our transport depends on oil, and 80 per cent of our homes are heated by natural gas. Oil and gas are going to play a major part in our energy supply for at least the next 40 years. Given the importance of the oil and gas sector to our employment, public finances and energy needs, what has the UK Government done to protect this vital industry? At a recent oil and gas summit in February, Malcolm Webb of Oil and Gas UK highlighted that. Three of the most critical components of the business environment for our industry are cost base, regulatory regime and tax regime. He continued, the regulatory regime has been a problem for the last 15 years. In that time, we have suffered 35 changes in UK energy and finance ministers and a regulator, variously housed in DTI, BEAR and DEC, which became seriously enfeebled and eventually not fit for purpose. With regard to the tax regime, he was just a scaring. Fiscal regime has, above all else, given the UK a reputation for instability, and today burdens a mature North Sea with an outdated complex and unpredictable tax rates ranging from 60 to 81 per cent. The 2012 economic report from Oil and Gas UK highlighted that. The offshore oil and gas industry is the most highly taxed business in the country. Fields developed since March 1993 are taxed at 62 per cent, being liable for both corporation tax at 30 per cent and a supplementary charge at 32 per cent. The marginal tax rate rises to 81 per cent for fields that received development consent before mid-March 1993. Those are also being liable for petroleum revenue tax at 50 per cent. The supplementary charge was introduced by Labour in 2002 when the price of oil was $25 per barrel. However, it was the Tory budget of 2011 that created much of the uncertainty in the industry today when they increased overnight the charge from 20 per cent to 32 per cent. They have since reduced the charge but only by 2 per cent. In 2014, just 14 exploration wells were drilled, the lowest number since the beginning of the industry in the 1960s, and the appraisal wells have now fallen to almost zero. Without this exploration work, the oil industry is not able to build up r