Autumn statement: North Sea and shale win
3 Dec 2014
Chancellor George Osborne today used his Autumn Statement to increase tax relief for North Sea oil and gas and create a sovereign wealth fund for shale gas revenues taken from the North of England.
Osborne announced that the supplementary charge would be cut from 32% to 30%, the ring-fenced expenditure allowance extended from six years to 10 years and a new cluster area allowance.
“This demonstrates our commitment to the tens of thousands of jobs that depend on this great British industry,” said Osborne.
These tax reliefs, which will be revealed in more detail tomorrow in Aberdeen, follow calls from industry for the government to take action in the North Sea after industry confidence in the region fell to its lowest since 2008.
Today we take steps to back business, support science, and invest in infrastructure
Chancellor George Osborne
The chancellor today also announced the creation of a sovereign wealth fund for the North England that would use revenues from shale gas extracted in the region to invest in a long-term economic plan.
Other measures with potential significance for the process industries included a raising of the R&D tax credit for small and medium companies to 230% and the credit for large firms to 11%, plus the introduction of a £10,000 government-backed interest-free loan for postgraduate study.
Osborne also promised to expand the British Business Bank, extend the Funding for Lending scheme and announced a full review of the structure of business rates.
“Today we take steps to back business, support science, and invest in infrastructure,” said Osborne.
As part of the government’s backing of science, the chancellor confirmed a quarter of a billion investment in the new Sir Henry Royce Institute for advanced material science in Manchester, with branches in Leeds, Liverpool and Sheffield.
“We’re also committing to the industry of the North with investment in new high value manufacturing research,” said Osborne.
