UK Energy Minister Charles Hendry has argued that Scotland must not benefit from her natural resources at the expense of the rest of the UK.
The Tory MP has also vowed that the Westminster government will do all it can in order to “get every last drop” of oil and gas out of the North Sea.
Speaking at the Tory conference in Perth, Mr Hendry implied that the UK’s international competitiveness risked being undermined by what he called a “Scotland versus England” approach and that what was needed was a focus on the “British Government supporting Scottish businesses, for the benefit of Scotland, and Britain”.
The Tory MP claimed that the North Sea had been forgotten about and admitted that the resource would remain vital to the UK for decades.
Mr Hendry said: “The North Sea remains one of the most important energy resources in Europe, too often it is seen as the forgotten part of our energy equation, but not any longer.
“For some decades to come, we will still need oil and gas, so the basic reality is that we can either produce our own or we will have to import them.
“And I am in no doubt that one of our core objectives, at this time of uncertainty, is that we must ensure that we get out every last drop.”
Mr Hendry speculated that investment in the sector would rise and that the decline in production would slow. He also expressed a desire to see Scottish based companies win contracts both here and overseas.
He added: “This year we expect investment in the North Sea to be up by 60% on the last two years, potentially halving the rate at which production is declining. And as a British energy minister, I want those outstanding companies in the supply chain, based here in Scotland, to win more contracts here, and to use that as the basis for winning more contracts overseas.
“But if we want to achieve that, then it’s not Scotland against England, but a British Government supporting Scottish businesses, for the benefit of Scotland, and Britain.”
The UK Minister went on to highlight the importance of renewable energy and expressed a desire to exploit “the genius of Scottish universities, like Edinburgh and the inventiveness of businesses like Shell, Scottish Power and SSE” to develop more clean energy.
World events have pushed energy to the top of the political agenda. Japan’s escalating nuclear crisis and the significant rise in oil prices due to events in the middle-east have ensured that energy will feature prominently in the forthcoming Holyrood elections which will see the anti-nuclear SNP against the pro-nuclear Labour party.
Rising oil prices has also seen the parties clash with the SNP calling for an oil fund and a fuel duty regulator, both opposed by Labour. Oil is currently sitting at just over $100 a barrel, this has ensured that the sector will generate over £10 billion for the UK Treasury this year alone, £1 billion more than expected.
The admission from a UK Minister that the North Sea will underpin the British economy ‘for decades’ is sure to be seized upon by those calling for Full Fiscal Autonomy (FFA) for Scotland.
The call for FFA will be particularly potent given that from next year will begin a series of savage cuts to the Scottish block grant, starting with a cut of £1.3 billion.