Lib Dems face split after North Sea oil ‘budget backlash’


by G.A.Ponsonby

The decision by the UK coalition government to raid the North Sea oil and gas sector in order to fund key policy commitments has caused a split within the Lib Dem party.

Newspaper reports have suggested that several Lib Dem MPs, including Scottish-based figures, are unhappy with the UK chancellor George Osborne’s decision to use the North Sea oil and gas sector in order to raise £10 billion over 5 years to fund key coalition policies.

The decision to hike up taxes on the sector has caused outrage in Scotland with politicians and industry figures condemning the move claiming that it will lead to significant job losses in Scotland as investment is hit.

On Wednesday Scottish Secretary Michael Moore boasted the Lib-Con Coalition had “shot the SNP fox” on introducing a fuel duty stabiliser and defended the oil raid adding: “Mr Swinney has a choice: If he wants to help the motorist, he should tell us where he would get the money from.”

Yesterday, however, splits emerged after senior Scottish Lib Dem MP Malcolm Bruce broke ranks and pledged to raise the matter with Treasury Ministers, adding: “I am certainly not going to support this measure”.

Lib Dem Sir Robert Smith, joined his colleague and said the hike was “devastating” for the local economy and the “UK as a whole”.  The MP for West Aberdeenshire and Kincardine added: “It think it puts the credibility of the Government’s economic policy at serious risk.”

The disarray has echoes of the party’s split over tuition fees after several MPs, including Scottish MP Michael Moore, voted in favour of introducing them in England after the party campaigned against fees in the General Election run up.

The move to squeeze Scotland’s oil and gas sector has been heavily criticised by leading industry figures amidst claims that the North East of Scotland will be hit hard and warnings of 40,000 job losses.

The Scottish backlash will be unwelcome for Scottish Lib Dem leader Tavish Scott who already faces problems in Scotland after the UK party aligned itself with the Tories.

It has also thrust energy and Scotland’s natural resources into the Holyrood election campaign spotlight and comes in the wake of the nuclear crisis in Japan that has raised serious doubts over the safety of nuclear power plants.